5. Rami now has $8000. How much would he have after 8 years if he leaves it invested at 8% with annual compounding? O a) $9,560 Ob) $7,560 O c) $12,555 d) $14,807 e) None of the above
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- An LBO purchases a business for $250,000,000, 80% of which is debt. In 7 years, the LBO sells it for $350,000,000. If the debt principal is reduced to 50% of the original principal, what is the internal rate of return (IRR) of this investment? Multiple Choice 5.71% 12.50% 16.99% 40.00% 25.85%Suppose you inherited $100,000 and invested it at 7% per year. What is the most youcould withdraw at the end of each of the next 10 years and have a zero balance atYear 10? How much could you withdraw if you made withdrawals at the beginningof each year? ($14,237.75, $13,306.31)Ellen now has $125. How much would she have after 8 years if she leaves it invested at 8.5% with annual compounding? a. $205.83 b. $216.67 c. $228.07 d. $240.08 e. $252.08 Last year Rocco Corporation's sales were $225 million. If sales grow at 6% per year, how large (in millions) will they be 5 years later? a. $271.74 b. $286.05 c. $301.10 d. $316.16 e. $331.96 How much would $20,000 due in 50 years be worth today if the discount rate were 7.5%? a. $438.03 b. $461.08 c. $485.35 d. $510.89 e. $537.78
- Halliday Inc. receives a $2 million payment once a year. Of this amount, $700,000 is needed for cash payments made during the next year. Each time Halliday deposits money in its account, a charge of $2.00 is assessed to cover clerical costs. If Halliday can hold marketable securities that yield 5 percent, and then convert these securities to cash at a cost of only the $2 deposit charge, what is the total cost for one year of holding the minimum cost cash balance according to the Baumol model?TEME is a manufacturer of toy construction equipment. If it pays out all of its earnings as dividends, it will have earnings of 0.3 million per quarter in perpetuity. Suppose that the discount rate, expressed as an effective annual rate (EAR), is 16%. TEME pays dividends quarterly. Suppose that TEME is considering a one-time expansion into toy xylophones. It is estimated that this will cost 1M. Assume that this cost will be incurred at the end of the year, one year from now. As a result of expansion, earnings in subsequent quarters (i.e. starting in 1 year and 1 quarter from now) would be 0.05 million higher than without the expansion. Calculate the value of TEME if it undertakes the investment.1. What is the accumulated amount after 5 years of P7,500.00 invested at a rate of 10% per year compounded quarterly? 2. How long will it take the money to double itself if invested at 16% compounded quarterly? In how many years are required for P3,000.00 to increase by P5,000.00 if it earns 12% compounded semi-annually?
- Crane Telecommunications Corp. has made an investment in another company that will guarantee it a cash flow of $24,500 each year for the next five years. If the company uses a discount rate of 17 percent on its investments, what is the present value of this investment? (Round factor values to 4 decimal places, e.g. 1.2514 and final answer to 2 decimal places, e.g. 15.25.)13. You have just learned that ZYK corporation offers an investment opportunity that costs P 5,000 every month and will amount to P 220,582 after 3 years. Compute thecompound amount factor.Leyton Lumber Company has sales of $10 million per year, all on credit terms calling for payment within 30 days, and its accounts receivable are $2.25 million. Assume 365 days in year for your calculations. What is Leyton's DSO? Do not round intermediate calculations.Round your answer to two decimal places. days What would DSO be if all customers paid on time? Do not round intermediate calculations. Round your answer to two decimal places. days How much capital would be released if Leyton could take actions that led to on-time payments? Write out your answer completely. For Example, 13.2 million should be entered as 13,200,000. Do not round intermediate calculations. Round your answer to the nearest cent.$
- A family has inherited $200,000 of they choose to invest the $200,000 in a factory at 8% on the quarterly basis, how many quaterly withdrawls kf $15,000 can be made from the factory?(Assume the first withdraw is made in the end of the first quarter?A small business purchased now for P50, 000 will lose P9, 600 each year for first 4 years. An additional investment of P30,000 in the business will required at the end of the fourth year. After 15 years the business can sold for P70, 000. What should be the profit each year from the fifth through the fifteenth year to obtain a rate return of 25%? Ans. P55.083Blossom Telecommunications Corp. has made an investment in another company that will guarantee it a cash flow of $25,000 each year for the next five years. If the company uses a discount rate of 19 percent on its investments, what is the present value of this investment? (Round factor values to 4 decimal places, e.g. 1.2514 and final answer to 2 decimal places, e.g. 15.25.)