Finance Answers

In 1895, the first a sporting event was held. The winner's prize money was $110. In 2007, the winner's check was $1,168,000.




(a) What was the percentage increase per year in the winner's check over this period?




(b) If the winner's prize increases at the same rate, what will it be in 2040?

Use the following data to answer Questions 1 through 14:

Data Mining is considering an expansion project. The company’s management has decided that the initial cost of the project is $300,000 with an additional installment cost of $80,000 and a $30,000 cost for research purposes related to the project. The project’s life is four years with a salvage value of $60,000 and it will be depreciated over four years using the straight-line method.

Management has also decided that $45,000 in inventories and $12,000 in accounts payable are needed if the project is taken today.

During the next four years, total sales are expected to be 525,100, 642,000, 504,400 and 698,500 respectively and total operating costs (excluding depreciation) are expected to be 234,000, 302,300, 272,000 and 440,000 respectively

The weighted average cost of capital is at 10% and the tax rate is 40%.

1. The net working capital (NWC) equals: *

A. $33,000

B. $45,000

C. $57,000

D. $47,000

Neha would retire 30 years from today and she would need ₹ 6,00,000 per year after her retirement, with the first retirement funds withdrawn one year from the day she retires.

Assume a return of 7% per annum on her retirement funds and if her planning is for 25 years after retirement, Calculate:

a. How much lumpsum she should deposit in her account today so that she has enough funds for retirement?

b. How much she should deposit each year so that she has enough funds for retirement?

Find a company you are familiar with and explain how its operation management functions?

Common fallacies Why are these statements wrong? (a) Because cigarettes are a

necessity, tax revenues from cigarettes will always increase when the tax rate is

raised. (b) Farmers should take out insurance against bad weather that might

destroy half of all their crops. (c) Higher consumer incomes always benefit

producers.

3)You opened a saving account for your son 4 years ago and deposited $500 at that time. Three years ago, you added another $500 to the account. Last year, you deposited an additional $300 into this account. With an interest rate of 5% compounded annually, how much is in the account today?


4)Mike borrowed $150,000 from ABC Bank for 5 years at an interest rate of 12% compounded monthly. How much is his monthly loan payment?

1)Cash inflows expected from a project are $28,000 for year 1, $22,000 for year 2, $20,000 for year 3, $25,000 for year 4 and $20,000 for year 5. Given the discount rate of 10%, what is the total present value of cash flow of this project?


2)Melinda needs to accumulate $50,000. In order to do so, she plans to save at the start of every year starting today for 10 years with an interest rate of 10% per annum. How much will she need to deposit every year to reach that amount?

Neha would retire 30 years from today and she would need ₹ 6,00,000 per year after her retirement, with the first retirement funds withdrawn one year from the day she retires. Assume a return of 7% per annum on her retirement funds and if her planning is for 25 years after retirement, Calculate:


A. How much lump sum she should deposit in her account today so that she has enough funds for retirement?


B. How much she should deposit each year so that she has enough funds for retirement?

jon snow requires a loan of $15000. he enquires with three banks, bank A, bank B and bank C. bank A offers J24=6.8%; bank B offers J2=7% and bank C offers J1=6.95%. Which bank should jon get his loan from

a loan of $500 is to be paid with two payments of $300, one in 3 months, and another in 6 months. the compound interest charged per annum on the loan is;