Cris Li decided to go into the business at the age of 23, he deposits a certain amount and will increase the deposit by 15,000 each year until the age of 33 to reach 20M on that age. If the fund can be invested at 15% compounded annually, how much should his initial investment be? DRAW THE CASH FLOW DIAGRAM.
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- Buena Vision Clinic is considering an investment that requires an outlay of 600,000 and promises a net cash inflow one year from now of 810,000. Assume the cost of capital is 10 percent. Required: 1. Break the 810,000 future cash inflow into three components: a. The return of the original investment b. The cost of capital c. The profit earned on the investment 2. Now, compute the present value of the profit earned on the investment. 3. Compute the NPV of the investment. Compare this with the present value of the profit computed in Requirement 2. What does this tell you about the meaning of NPV?4. A young man has decided to go into the business at the age of 25, he deposits a certain amount and will increase the deposit by 50,000 each year until the age of 35 to reach 30M on that age. If the fund can be invested at 15% compounded annually, how much should his initial investment be? DRAW THE CASH FLOW DIAGRAMWalt is evaluating an investment that will provide the following cash flows at the end of each of the following years: year 1, $12,500; year 2, $10,000; year 3, $7,500; year 4, $5,000; year 5, $2,500; year 6, $0; and year 7, $12,500. Walt believes that he should earn an annual rate of 9% on this investment. How much should he pay today for the investment?
- Metaz is planning to invest OMR 3500 every year for the next six years in an investment paying 12 percent annually. What will be the amount he will have at the end of the six years Select one: a. 28403.16 OMR b. 24680.54 OMR c. 25107.50 OMR d. None e. 24680.54 OMR Find the profitability index for Shanfari Company if the initial investment is 7900 OMR and the cash Inflows are as follows: Year 1 =1350 OMR; Year 2 =2400 OMR; Year 3=2450 OMR and Year 4=2500 OMR. Use discount rate as 5.05%. Select one: a. 1.15 Accept b. 1.15 Reject c. None of the options d. 0.96 Reject e. 0.96 AcceptHow much more or less money would you have to invest today to have $6,500 in 4 years at 5.30% compounded monthly instead of 5.46% compounded annually? Green Inc. invested $20,000.00 in a fund at an interest rate of 4.00% compounded annually. At the end of 22 months their investment advisor transferred these funds to another investment that was yielding 14.50% compounding monthly for the next year. By how much did the fund grow?At the start of the year, Piotr has an investment fund worth $30,000.00. 4 months later the fund is worth $30,750.00 and Piotr deposits another $3,000.00. 4 months after that, the fund is worth $34,425.00 and Piotr withdraws the $3,000.00 his deposited the time before. At the end of the year the fund is worth $31,425.00. a) What is the Dollar Weighted Return for Piotr's investment? b) What is the Time Weighted Return for the investment fund? c) What would the fund balance at the end of year have to be to make the Time Weighted Return for the year equal the Dollar Weighted Return for the year? d) In this case (TWR = DWR) what was the return on the investment fund in the last time period?
- Today, you invest P100,000 into a fund that pays 25% interest compounded annually. Three years later, you borrow P50,000 from a bank at 20% annual interest and invest in the fund. Two years later, you withdraw enough money from the fund to repay the bank loan and all interest due on it. Three years from this withdrawal you start taking P20,000 per year out of the fund. How much was withdrawn?Mr.Andi is a manager at an automation company. As part of his future planning, Mr.Andi plan to manage an investment IDR 100 thousand in the first year and increase this amount is 10% annually. To solve this problem, you have to create a spreadsheet from the data provided to complete your calculations along with the cash flow. Based on the data given: (a) How long will Mr.Andi's account have value in the future of IDR 3,000,000 at a rate of return of 6% per annum? (b) If Mr.Andi counts up to the next 30 years, find the nominal amount in the next 10, 20, and 30 years that Mr. Andi will achieve. The calculation spreadsheet can describe the amount deposited annually.A business man must fund an account for him to pay the maintenance of the building after it shut down in 10 years. The costs until the business shutdown is part of the operating cost of the business while the maintenance costs starts in 10 years at 23,000 annually. Draw the cash flow diagram and solve on how much money should be deposited if the fund earns an interest of 12 percent?
- Suppose you have an opportunity to invest in a fund that pays 12% interest compounded annually. Today, you invest $10,000 into this fund. Three years later(EOY 3), you borrow $5,000 from a local bank at 10% annualinterest and invest it in the fund. Two years later (EOY 5), you withdraw enough money from the fund to repay the bank loan and all interest due on it. Three years from this withdrawal (EOY 8) you start taking $2,000 per year out of the fund. After five withdrawals of $2,000, you have withdrawn your original $10,000. The amount remaining in the fund is earned interest. How much remains?Today, you invested Php 100,000 into a fund that pays 25% compounded annually. Three years later, you borrow Php 50,000 from a bank at 20% annual interest and invested it in the fund. two years later, you withdraw enough money from the fund to repay the bank loan and all interest dues on it. Three years from this withdrawal you start taking Php 20,000 per year out of the fund. After five withdrawals, you withdraw the balance in the fund. How much was each withdrawals?Fred is considering an investment that will cost him $1000 today and will pay $200 at the end of each month for twelve months with a final cost at the end of the twelve month period of $400. Draw two cash flow diagrams, one showing the cash flows separately and the other showing the net cash flows.