Salthajeb.files.wordpress.com



Please provide and answer to the following problems using Excel. For your Excel answer, please follow the Excel format and functions presented in Chapter 5 of the textbook. Early submission Due Date 1/11/2017(60 points) Final Due Date 8/82017 (50 points)Kuwait Investments has offered you the following investment opportunity:KD 15,000 at the end of each year for 20 years. How much would you be willing to pay for this investment if you required a 9% rate of return?If the payments were received at the beginning of each year, what would you be willing to pay for this investment?How much would you be willing to pay for this investment if you required a 9% rate of return?KD 15,000 at the end of each year for the first 7 years, plusKD 7,000 at the end of each year from years 8 through 12, plusKD 5,000 at the end of each year from years 13 through 20.If the payments were received at the beginning of each year, what would you be willing to pay for this investment?Suppose today is July 1, 2010, and you deposit KD 7,000 into an account today. Then you deposit KD 2,500 into the same account each July 1, 2011 and continuing until the last KD 2,500 deposit is made on July 1, 2016. Also, assume you withdraw KD 13,500 on July 1, 2018. Assuming a 5% annual compound interest rate, what will be the balance in the account at the end of July 1, 2020? (hint: find the present value for CFs then the future value for lump sum)Your sister turned 40 today, and she is planning to save $5,000 per year for retirement, with the first deposit to be made one year from today. She will invest in a mutual fund that's expected to provide a return of 9% per year. She plans to retire 30 years from today, when she turns 70, and she expects to live for 15 years after retirement, to age 85. Under these assumptions, how much can she spend each year after she retires if she can still earn 9% a year during her retirement years? Her first withdrawal will be made at the end of her first retirement year. Sami is considering taking early retirement, having saved KD 300,000. She desires to determine how many years the savings will last if KD 25,000 per year is withdrawn at the end of each year. Sara feels the savings can earn 5% per year.This year’s operating costs (savings) were down $75,000, a decrease directly attributable to the $430,000 investment (costs) in the automated materials handling system put in place at the beginning of the year. If this level of annual savings continues for five more years, resulting in six total years (n=6 years) of annual savings, what compounded annual rate of return will that represent? How much is the net present value this investment if the required rate of return is 5%?If these annual savings continue for nine more years, for a total of 14 years of annual savings(n=14), what compounded annual rate of return will that represent? How much is the net present value this investment if the required rate of return is 5%?A football player is negotiating his new contract. His opportunity cost is 10%. He has been offered three possible 4-year contracts. Payments are guaranteed, and they would be made at the end of each year. Terms of each contract are as follows:Years:12349690107239000||||Contract 1:KD 3,000,0003,000,0003,000,0003,000,000Contract 2:KD 2,000,0003,000,0004,000,0005,000,000Contract 3:KD 7,000,0001,000,0001,000,0001,000,000As his adviser, which contract would you recommend that he accepts? ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download