Fin 370 Week 2 Team Assignment Pepsin

QUESTION AND PROBLEM SETS3r = (FV/PV) ^1/t -11. r = (297/181) ^1/4 -1 = (1.641) ^1/4 -1 = 1.1318 -1 = 0.1318 or 13.18%2. r = (1,080/335) ^1/18 -1 = 1.0672 -1 = 0.0672 or 6.72%3. r = (185382/48000) ^1/19 -1 = (3.862)^1/19 -1 = 1.0737 -1 = 0.0737 or 7.37%4. r = (531616/40353) ^1/25 -1 = (13.174)^1/25 -1 = 1.1086 -1 = 0.18086 or 10.86%Chapter 6Question 2. Present Value and Multiple Cash Flows [LO1] Investment X offers to pay you $4,700 per year for eight years, whereas Investment Y offers to pay you $6,700 per year for five years. Which of these cash flow streams has the higher present value if thediscount rate is 5 percent? If the discount rate is 15 percent?PVA = C ({1-[1/(+r)^t]}/r)A 5% interest rateX at 5%: PVA = 4700 { [1- (1/1.05)^8 ] /.05} = $30377.10Y at 5%: PVA = 6700 { [1- (1/1.05)^5 ] /.05} = $29007.49At 15% interest:X at 5%: PVA = 4700 { [1- (1/1.15)^8 ] /.15} = $21090.41Y at 5%: PVA = 6700 { [1- (1/1.05)^5 ] /.15} = $22459.44CorrectQuestion 20. Calculating Loan Payments [LO2, 4] You want to buy a new sports coupe for $79,500, and the finance office at the dealership has quoted you an APR of 5.8

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Chapter 5Question 3Output area:Input area:Present valueYears nterest ratFuture value$ 5,039.79 13 9% $ 15,451 $ 39,332.59 4 7% $ 51,557 $ 1,730.78 29 24% $ 886,073 $ 3.37 40 35% $ 550,164
Chapter 5Question 4Input area:Output area:Present valueYearsInterest rateFuture value$ 181 4 13.18%$ 297 335 18 6.72%1,080 48,000 19 7.37%185,382 40,353 25 10.86%531,618
Here we need to fnd present valuecash FowsYearInvestment XInvestment Y147006700247006700347006700447006700547006700647000747000847000Part (A)Discount rate5Present value o± investment X$30,377.10 Present value o± Investment Y$29,007.49 Part (B)Discount rate15Present value o± investment X$21,090.41 Present value o± Investment Y$22,459.44 2.Present Value and MulTple Cash ²lows [LO1] Investment X o³ers to pay you $4,700 per year ±or eight years, Investment Y o³ers to pay you $6,700 per year ±or fve years. Which o± these cash Fow streams has the higher prei± the discount rate is 5 percent? I± the discount rate is 15 percent?
Par value of Bond1000years to maturity23coupon rate5.8yield to maturity4.7Coupon value58(1+YTM)^number of periods2.87589932=0.6522833.

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