Problem 2 (10 marks) You have been very successful in business and it is time to buy the big boat so you can sail the blue seas of the Bedford basin and entertain your friends. You do your research and find the boat you want in Portugal. The price of the boat is $300,000 and it will cost $20,000 to have the boat delivered to Halifax. You go to the bank to borrow the entire amount of the purchase and the bank offers you a loan with a 20 year amortization at 5% with a 5 year term. You plan on making monthly payment on this loan. Calculate your monthly payments. (3 marks) a. 2 6 View as Text b. Your parents have been offered another investment that will pay $90 per year forever and the first cash flow will occur 11 years from today; however, the cash flow amounts Due 6:00 pm, June 5, 2020 Page 7 FINA2360 Summer 2020 Assignment #2 Total 52 marks Due Friday June 5, 2020 at 6:00 pm Atlantic Daylight Savings Time. are expected to grow at 1% forever. If interest rates are expected to be 6.125% forever, what is this investment worth today? HINT: be sure to include a time line in your explanation to your parents. Show your work, time line and explain your answer. (4 marks) late. Instructions: Label your work and show any calculations that you have used to answer the questions. Total Marks 52 Chapter 6 Cash Flow Valuations Problem 1 (8 marks) Your parents have come to you for financial advice because you have told them about this incredible finance course you are taking and they are paying for. Your parents have been offered an investment that will pay $100 per year forever and the first cash flow will occur 11 years from today. If interest rates are expected to be 6.125% forever. what is this investment worth today? HINT: be sure to include a time line in your explanation to your parents. Show your work and explain your answer. (4 marks) a Problem 2 (10 marks) You have been very successful in business and it is time to buy the big boat so you can sail the blue seas of the Bedford basin and entertain your friends. You do your research and find the boat you want in Portugal. The price of the boat is $300,000 and it will cost $20,000 to have the boat delivered to Halifax. You go to the bank to borrow the entire amount of the purchase and the bank offers you a loan with a 20 year amortization at 5% with a 5 year term. You plan on making monthly payment on this loan. Calculate your monthly payments. (3 marks) a. 2 6 View as Text b. Your parents have been offered another investment that will pay $90 per year forever and the first cash flow will occur 11 years from today; however, the cash flow amounts Due 6:00 pm, June 5, 2020 Page 7 FINA2360 Summer 2020 Assignment #2 Total 52 marks Due Friday June 5, 2020 at 6:00 pm Atlantic Daylight Savings Time. are expected to grow at 1% forever. If interest rates are expected to be 6.125% forever, what is this investment worth today? HINT: be sure to include a time line in your explanation to your parents. Show your work, time line and explain your answer. (4 marks) late. Instructions: Label your work and show any calculations that you have used to answer the questions. Total Marks 52 Chapter 6 Cash Flow Valuations Problem 1 (8 marks) Your parents have come to you for financial advice because you have told them about this incredible finance course you are taking and they are paying for. Your parents have been offered an investment that will pay $100 per year forever and the first cash flow will occur 11 years from today. If interest rates are expected to be 6.125% forever. what is this investment worth today? HINT: be sure to include a time line in your explanation to your parents. Show your work and explain your answer. (4 marks) a
