an agreement stipulates payments of $4500, $3000, and $5500 in 4,8, and 12 months , respectively from today what is the highest price an investor will offer today to purchase the agreement if he requires a minimum rate it return of 10.5%
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an agreement stipulates payments of $4500, $3000, and $5500 in 4,8, and 12 months , respectively from today what is the highest price an investor will offer today to purchase the agreement if he requires a minimum rate it return of 10.5%
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- An agreement stipulates payments of $5000,$3500 and $6000 in three, six and nine months, respectively from today. what is the highest price on an investor will offer today to purchase the agreement if he requires a minimum rate of return of 3.75%?An outright purchase of $20,000 now (a lump-sum payment) can be traded for 24 equal payments of $941.47 per month, starting one month from now. What is the monthly interest rate that establishes equivalence between these two payment plans?You are offered a $3,000,000 contract to be paid to you over 6 years at $500,000 per year. The first payment will be made at the end of the year. If the current market interest rate is 3.5%, what is the contract really worth to you? $2,500,000.00 $3,275,076.09 $2,664,276.51 $3,000,000.00
- you entered a one-year long forward contract on FOJC in April 2023 when the forward price was US 286 cents per pound. Each contract is also for delivery of 15,000 pounds. After one month (t=1 month) the price of the forward concentrate was US 293 cents per pound. Assuming a risk-free rate of 5% with continuously compounding, what is the value of the forward contract after one month?A contract will pay you $5000 per year every other year for the next 30 years. That is, since today is time 0, the contract will pay you $5000 in year 2, 4, 6. 28, 30. The discount rate is 8% compounded semiannually. What is the present value of this contract?When deciding on a contract based on present value and a discount rate of 10%, what other factors must be considered? Contract 1 $900,000 signing bonus $850,000 at the end of each year for the next 5 years Contract 2 $200,000 immediate signing bonus $100,000 at the end of each year for the next five years $150,000 a year at the end of years 5 through 10 $1,000,000 a year at the end of years 11 through 40 Contract 3 $1,000,000 immediate signing bonus $500,000 at the end of year 1 $1,000,000 at the end of year 2 $1,500,000 at the end of year 3 $2,500,000 at the end of year 4 As part of the third offer he was also promised a $200,000 bonus for any year in which he was selected to play in the Pro Bowl All Star game. his agent figured there was a 25% probability of that occuring in each of the next 4 years.
- Calculate the present value of the four contract proposals, factor in any probabiity considerations where appropriate. discount rate is 10%. Contract 1 $900,000 signing bonus $850,000 at the end of each year for the next 5 years Contract 2 $200,000 immediate signing bonus $100,000 at the end of each year for the next five years $150,000 a year at the end of years 5 through 10 $1,000,000 a year at the end of years 11 through 40 Contract 3 $1,000,000 immediate signing bonus $500,000 at the end of year 1 $1,000,000 at the end of year 2 $1,500,000 at the end of year 3 $2,500,000 at the end of year 4 As part of the third offer hhe was also promised a $200,000 bonus for any year in which he was selected to play in the Pro Bowl All Star game. his agent figured there was a 25% probability of that occuring in each of the next 4 years. Contract 4 $1,100,000 sign bonus $2,000,000 at the end of each year for the next three yearsA contract requires end-of-month payments of $240 for another 9 1/4 years. What would an investor pay to purchase this contract if she requires a rate of return of 4.5% compounded monthly? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Investor would pay $A borrower and lender negotiate a $25,000,000 interest-only loan at an 8.0% interest rate for a term of 15 years. There is a 10 year lockout period. Should the borrower choose to prepay this loan at any time after the 10th year, a yield maintenance fee (YMF) will be charged. The YMF will be calculated as follows: A treasury security with a maturity equal to the number of months remaining on the loan will be selected, to which a spread of 180 basis points (1.80%) will be added to determine the lender’s reinvestment rate. The penalty will be determined as the present value of the difference between the original loan rate and the lender’s reinvestment rate. If the loan is repaid at the end of the 12th year, and 3-year treasury rates are 5.0%, what is the YMF? $797,795 $341,336 $547,229 $633,272
- A leasing contract calls for an immediate payment of $101,000 and nine subsequent $101,000 semiannual payments at six-month intervals. What is the PV of these payments if the annual discount rate is 9%? (Hint: First find the semiannual rate that is equivalent to the annual rate.)1. A contract calls for a lump-sum payment of $15,000. Find the present value of the contract assuming. When making these calculations, you need to use a present value factor that is carried to three decimal places to get the correct answers. a. The payment is due in five years, and the current interest rate is 9 percent. Your answer should contain a dollar sign.b. The payment is due in ten years and the current interest rate is 5 percent. Your answer should contain a dollar sign.c. Between the two calculations, A and B, which option is the best option for the person receiving the payment? State in a full sentence why you chose this option.A borrower and lender negotiate a $20,000,000 interest-only loan at a 9 percent interest rate for a term of 15 years. There is a lockout period of 10 years. Should the borrower choose to prepay this loan at any time after the end of the 10th year, a yield maintenance fee (YMF) will be charged. The YMF will be calculated as follows: A treasury security with a maturity equal to the number of months remaining on the loan will be selected, to which a spread of 150 basis points (1.50 percent) will be added to determine the lender’s reinvestment rate. The penalty will be determined as the present value of the difference between the original loan rate and the lender’sreinvestment rate. a. How much will the YMF be if the loan is repaid at the end of year 13 if 2-year treasury rates are 6 percent? What if two-year treasury rates are 8 percent?