Question 1 : e. A couple who has lust had a daughter decides to save to pay the fees university. He can create a university fund that bears interest at a rate of 7% annual assuming the child starts university at age 18. Parents estimate that $40,000 per year will be required to cover university expenses for 4 years. Determine the equal annual amounts that the couple will have to put aside until their daughter's admission to university. (On assumes that the first deposit will be made on the child's first birthday and that the last deposit will take piace on its eighteenth anniversary. The first Withdrawal wiii occur at the beginning of the first yearof university, when the child will have 18 years. Show your calculations in your working document. Support your answer with a cash flow diagram Let's say you make monthly deposits of 5500 into a registered retirement savings program (RRSP) that earns 10% interest on that component oua rterly, Calculate the balance after ll) years To solve this problem, appiy the principle that as soon as a deposit is made it begins to earn interest. Sh ow your calculations in your discussion paper Bond yield Michael Nguyen buys a new corporate bond for $1,000. The issuing company promises to pay the holder $45 interest every 6 months on $1,000 corresponding to the face value (pa rl of the security and to repay that 51,000 after 10 years. Two years later, Michael sells the bond to Maria Garcia for $900, Show your calculations In your discussion paper. 1 What is Michael's return on investment? 2- If Maria keeps the bond for the remaining 8 years before maturity, what is the return on investment? 3- What was the current return at the time Maria bought the bond? Apex must use a chemical finishing process for a product under a 67year manufacturing contract. Neitheroption 1 nor option 2 can be repeated once their useful life is complete. However, Chemicals H&H will offer option 3 at the same cost forthe duration ofthe contract. Option 1: The $100 000 Treatment A deVice has an annual operating and labour cost of $60 000 and is estimated to have a useful life 0M years and a salvage value nfslo 000. Optionl: The $150 000 Treatment B devrce has an annual operating and labour cost of $50 000 and is estimated to have a useful life of 6 years and a salvage value of $30 000. Option 3: Subcontract the process out at a cost of $100,000 per year. Based on the Equivalent Present Value (NPV) test, which option would you recommend, ifi = 12%. Show your calculations in your discussion paper, ConsiderA options including LRT line length: A1, A2, A3, A4, A design option has the same 307year service life and negligible salvage value. The expected annual benefits from travel time savings, accident prevention, emission reductions, and railway operating, and maintenance costs (as well as initial capital costs) are as follows: (See Excel * Prob Band all units are in millions ofoollars). Knowing that these are mutually exclusive options, what would be the best option at a 5% interest rate? Using the Incremental Investment ACR, show the sequence of calculations required to obtain the best results. Vou can do your calculations in Excel, but show your answers and key steps in your discussion paper Options investmentcost annual benefits Annual operating and maintenance costs A1 700 $ so $ 20 53 A2 950 s 120 S 30 $ A3 1300 S 160 $ 40 5 A4 2000 S 210 s 50 5 Review the 3 mutually exclusive options from Prob 7 in the Excel file. ii'the TRAM is 15%, which proyect will you choose, given the rate of return on incremental (or marginail investment? Do your calculations in Excel but show your approach in your working d ocu ment 0 -52 000,00 -$1 000.00 -33 000,00 1 $1 500,00 5300,00 51 500,00 51 000,00 5 500,00 52 000,00 5800,00 $500.00 51 000,00 R 2.437% 40,75% 24,81% \"MN
