Please answer all

9. You friend has developed a new design of mouse trap that he said works better than any other mouse trap available. He needs money for production, so he has asked you to invest in the new venture. He is offering you a percentage of the profits for the next seven years, and has estimated your share of the cash flows in Year 3 to be $55,000, increasing by $20,000 per year through Year 7 (there will be no cash flows in Years 1 or 2). You have decided this is a pretty risky proposition, so you are requiring a return of 16% in order to invest. What is the most you should be willing to invest in this project?

10. The engineering staff at the Sun Shipping Company has informed decision-makers that substantial money can be saved on the fleet's fuel bills if the ships' engines are adapted. Based on the cost of fuel, the engineers estimate that the firm will save $40,000 each year for the first 5 years and save $60,000 per year for the following five years. If these estimates are accurate, what would the company be willing to pay to adapt the engines? The company can earn 11% annually on its investments.

11. An industrial bank will loan you $7,500 for two years to buy miscellaneous equipment for your firm. The loan must be repaid in equal monthly payments. The amount of the monthly payments will be $349.56. What annual rate of interest is the bank charging you?

12. You have just withdrawn $143,806.59 from your investment account. You started with $50,000, made monthly payments into the account in the amount of $2,000, and received an annual interest rate of 11%. How many years was this investment in place?

13. What is the value of a perpetuity that pays a quarterly dividend of $0.50 and has a required rate of return of 8%?

14. You plan to buy a new BMW i8 5 years from now. You expect the price of this model of car to increase by 5% per year over the next 5 years. You have calculated that, when you buy the car 5 years from now, your monthly payment will be $3999.79, based on a 5 year loan at 12% annual interest. What is the current price of the car?

15. Ingham Airlines has leased out a jet under a 12-year arrangement. The lease requires the lessee to pay Air Atlantic annual payments of $500,000 beginning next year. If Air Atlantic can invest at 6 percent annually, what is the lease arrangement worth to it?

16. You want to start saving for your daughter's college education now. She will enter university at age 18, and you have decided to put $100,000 into an account to fund her education when she turns 18. If monthly deposits of $640.38 will allow you to reach your goal, how old is your daughter now? Assume you can earn 3% annual interest on your savings, compounded monthly.