Expert Answer :Future Values and Annuities?

Solved by verified expert:Question 1: Future values and annuitiesThe cost of a new automobile is \$10,000. If the interest rate is 5%, how much would you have to set aside now to provide this sum in five years?You have to pay \$12,000 a year in school fees at the end of each of the next six years. If the interest rate is 8%, how much do you need to set aside today to cover these bills?You have invested \$60,476 at 8%. After paying the above school fees, how much would remain at the end of the six years?Question 2: IRR ruleConsider the following two mutually exclusive projects:
Calculate the NPV of each project for discount rates of 0%, 10%, and 20%.What is the approximate IRR for each project?In what circumstances should the company accept project A?Calculate the NPV of the incremental investment (B – A) for discount rates of 0%, 10%, and 20%. What can you conclude?Question 3: IRR ruleThe TTL Shipbuilding Company has a noncancelable contract to build a small cargo vessel. Construction involves a cash outlay of \$250,000 at the end of each of the next two years. At the end of the third year the company will receive payment of \$650,000. The company can speed up construction by working an extra shift. In this case, there will be a cash outlay of \$550,000 at the end of the first year followed by a cash payment of \$650,000 at the end of the second year. Use the IRR rule to show the (approximate) range of opportunity costs of capital at which the company should work the extra shift.Question 4: Capital RationingBGMT Pharmaceuticals has \$1 million allocated for capital expenditures. Which of the following projects should the company accept to stay within the \$1 million budget? How much does the budget limit cost the company in terms of its market value? The opportunity cost of capital for each project is 11%.ProjectInvestment (\$ thousands)NPV (\$ thousands)IRR (%)13006617.22200-410.732504316.641001412.15100711.863506318.074004813.5Your paper should be one to two pages in length (excluding cover page and references) and formatted according to the CSU-Global Guide to Writing and APA Requirements. Be sure to discuss and reference concepts taken from the assigned textbook reading and relevant research. Review the grading rubric to see how you will be graded for this assignment.

Don't use plagiarized sources. Get Your Custom Essay on
Expert Answer :Future Values and Annuities?
Just from \$10/Page

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
\$26
The price is based on these factors:
Number of pages
Urgency
Basic features
• Free title page and bibliography
• Unlimited revisions
• Plagiarism-free guarantee
• Money-back guarantee
On-demand options
• Writer’s samples
• Part-by-part delivery
• Overnight delivery
• Copies of used sources
Paper format
• 275 words per page
• 12 pt Arial/Times New Roman
• Double line spacing
• Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.