4. Find the nominal rate if Php 25,000 is compounded continuously and will become Php 32,000 in3 years?"5. A condominium unit is offered at Php 950,000 cash or for payments of Php 200,000 now, Php300,000 in 3 years, and another Php 450,000 in 5 years, which option is better if the money isworth 16% compounded semi-annually?!

Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

Answered: Find the nominal rate if Php 25,000 is…

Business

Finance

Find the nominal rate if Php 25,000 is compounded continuously and will become Php 32,000 in 3 years?"

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 27P

See similar textbooks

Related questions

Q: Merchandise is received for $25,000 now and $50,000 in 6 months. If $10,000 is paid within a month,…

A: Since you have posted multiple questions, as per answering guidelines we shall be solving first…

Q: A hospital just purchased upgraded software for the Electronic Medical Record surgical dashboard.…

A: NPV is the method under Capital budgeting which help in taking the decision of project feasibility…

Q: National Corporation shares are selling for P50. Earnings for the last 12 months were P3 per share.…

A: Solution:- Price Earnings (P/E) Ratio means that how much times is the price of the entity, in…

Q: How much were the companies liabilities?

A: The Basic Accounting Equation Total Assets = Owner's Equity + Liabilities

Q: Find the present worth of cash flows of $1000 that start now (time 0) and continue through year 10,…

A: Present Value: The present value is the value of cash flow stream or the fixed lump sum amount at…

Q: How much money will he need to deposit into the annuity each quarter for the annuity to have a total…

A: Future Value of Ordinary Annuity: It represents the future value of the annuity cash flows made at…

Q: A vehicle was purchased for Rs. 30,000 its life was estimated as twelve years and the scrap value as…

A: Solution:- Depreciation means the fall in the value of the asset due to its usage. As per Reducing…

Q: Which one of these is a characteristic of a sensible payout policy? Set the dividends high even if…

A: The ways in which corporations return capital to their equity owners is known as payout policy.…

Q: In December 2017, an American investor buys 1,000 shares in a Mexican company at a price of 500…

A: Total number of shares purchased are 1000 Purchase price is 500 pesos Selling price is 550 pesos…

Q: Checkpoint 9.3) (Bond valuation) Calculate the value of a bond that matures in 12 years and has a…

A: Price of bond is which equates the present value of coupon payment and present value of par value on…

Q: 2) Which of the following statements is FALSE? A) The option buyer, also called the option holder,…

A: Option is a derivative contract which allows the buyer of the option a right to buy or sell the…

Q: A6) Finance What is a forward exchange rate? When does deliv- ery occur on a 90-day forward contract

A: Forward rate contracts are future oreinted contracts that they are received to be in the future.

Q: Use the formula for computing future value using compound interest to determine the value of an…

A: Here, Principal Amount (PV) is $13,000 Annual Interest Rate (r) is 3% Compounding Period (m) is…

Q: Consider a loan of $2 million that is paid quarterly over a period of 10 years. Calculate the dollar…

A: In case of loan payments a fixed amount is paid in each period. While the amount of each payment…

Q: How important is trade credit as a source of short-term financing?

A: Trade Credit is the largest use of capital by the business -to business sellers in the United…

Q: For a put option of CN¥ with $0.14 exercise price and $0.0005 premium, the breakeven spot price for…

A: Given: Exercise price =$0.14 Premium = $0.0005

Q: A rented his apartment to B for $5,000 per month in January 2015. However, they both agreed to…

A: A has the legal right to sue B for the unpaid rent. The amount that A can collect, on the other…

Q: Q) One university needs some maintenance. The owner of the university decides to deposit $400000 in…

A: Present Value: The present value is the value of cash flow stream or the fixed lump sum amount at…

Q: ineer John Cena is planning for retirement decides that he wishes to have income of Php 200,000 per…

A: There is need of planning for retirement and if done on the proper time than you could achieve good…

Q: mount saved on interest

A: Amortized loan refers to the amount of loan which requires regular monthly payments. Every payment…

Q: You want to purchase a machine for your business and you are given 3 different payment schedules:…

A: Given, Three payment schedules Rate of interest is 10%

Q: Peter purchased a furniture set with 15% downpayment and end-of-month payments of $80 for 4 years at…

A: Present value refers to the value of future cash flows which is present today based on the…

Q: QUESTION 3 For the nonconventional net cash flow series shown, the external rate of return per year…

A: MIRR is techniques under Capital budgeting which is used to assess the cost and profitability of a…

Q: Your grandfather placed $5,000 in a trust fund for you. In 12 years what will be the worth of the…

A: Solution:- When an amount is invested, it earns interest. The amount initially invested is called…

Q: Trevor purchased a 90-day interest-bearing note at 4.80% p.a. that has a face value of $25,000.00.…

A: Solution:- When an interest bearing note is purchased, it provides interest to the holder. So,…

Q: A project proposal requiring P840,000 initial investment will result to annual cash return as…

A: Here, To Find: Part A. Net Present Value (NPV) =? Discounted payback period =? Part B. Payback…

Q: After the introductory period is over, determine how much it would cost you in interest to carry a…

A: Interest expense refers to those expense which is paid by an individual or company on the amount…

Q: One university needs some maintenance. The owner of the university decides to deposit $400000 in an…

A: Present Value : Present worth is that amount which shown present Value of deposit done in future.

Q: A key driver of shareholder value is the aggregate value of the customer base. Classify the major…

A: A customer base is a collection of customers to whom a company promotes and sells its goods or…

Q: Find the amount necessary to fund the given withdrawals. Quarterly withdrawals of $950 for 5 years;…

A: We will use the concept of time value of money here. As per the concept of time value of money the…

Q: A division of Raytheon owns a 5-year-old turret lathe used to manufacture fabricated metal products…

A: Incremental Analysis: Incremental analysis is a technique that is used to compare different projects…

Q: Is the “forward price” the same thing as the “value of the forward contract” Explain.

A: Derivative is defined as the contract, which are between the two or more parties, who has the value…

Q: 3. Compute for the following: Required: Payback period, payback reciprocal, accounting rate of…

A: Capital budgeting proposals can be evaluated using discounted cash flow (DCF) techniques or non DCF…

Q: b. In a different economy, vault cash is $1000000, deposits by depository institutions at the…

A: Money multiplier: The highest limit to which the money supply may be altered by changes in the…

Q: (Bond valuation) A bond that matures in 20 years has a $1,000 par value. The annual coupon…

A: Given: Bond par value=$1000 Duration=20 years Coupon interest=14% Yield to maturity=15% To find:…

Q: Why is TIME the portfolio manager’s best friend?

A: Portfolio manager: Portfolio managers are specialists that manage investment portfolios in order to…

Q: A print shop borrows $2900 from a credit union for 231 days. The credit union charges simple…

A: Borrowed amount = $2,900 Time Period = 231 Days Interest Rate = 8.25%

Q: Ant Ltd is a profitable manufacturing company. After evaluation of the budget for the coming…

A: NPV: Net Present Value is the technique of Capital budgeting under which we will calculate the…

Q: Write the formula for the present value. 12 3 6 1 2 3 nnn-2 + n n+1 7+2 20-1

A: The notion of present value says that money today is worth more than money tomorrow. In other words,…

Q: A. Contrast the nominal rate of interest with the real rate of interest. B. Why would “a belief in…

A: Average annual return using arithmetic mean method With annual returns r1, r2, r3,.........rn, the…

Q: Sweden (krona) SEK 8.4976 8.4388 8.3886 8.2836

A: Compute cost of covering of liability to pay Swedish kronor to a Swedish company after one year by…

Q: What is the CW, when = 10% per year of $1,500 per year, starting in year one and continuing forever…

A: Time value of money (TVM) refers to the method or technique which is used to measure the amount of…

Q: Use the average daily balance method to compute the finance charge on the credit card account for…

A: Average daily balance method is the method wherein the finance charges are calculated on the balance…

Q: Calculate the yield to maturity of a bond with the help of the following given information: -…

A: Yield to maturity = [Interest +(Face value - Market price) /Life if bond]/[Face value + Market…

Q: Why would a lender offer unsecured short-term loans when it could demand collateral?

A: When your cash flow is poor, short-term loans give rapid cash. Compared to regular loans, it has a…

Q: At the end of 3 years, what is the balance?

A: Time value of money (TVM) refers to the method or technique which is used to measure the amount of…

Q: make the distinction between c

A: Rate of return refers to the percentage of profit or loss on an investment for a specified period…

Q: Choose the best option in terms of which sets of workers and equipment should be chosen. The project…

Q: IT project management is supported by a variety of tools and technologies.

A: The process of developing and administering an information technology development plan in order to…

Q: ppose your firm is considering investing in a project with the cash flows shown below, that the…

A: MIRR is modified internal rate of return in this it is assumed that reinvestment is done on the cost…

Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

Question

4. Find the nominal rate if Php 25,000 is compounded continuously and will become Php 32,000 in
3 years?"
5. A condominium unit is offered at Php 950,000 cash or for payments of Php 200,000 now, Php
300,000 in 3 years, and another Php 450,000 in 5 years, which option is better if the money is
worth 16% compounded semi-annually?!

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

If you invest $15,000 today, how much will you have in (for further instructions on future value in Excel, see Appendix C): A. 20 years at 22% B. 12 years at 10% C. 5 years at 14% D. 2 years at 7%
Project X costs $10,000 and will generate annual net cash inflows of $4,800 for five years. What is the NPV using 8% as the discount rate?
Jullo Company is considering the purchase of a new bubble packaging machine. If the machine will provide $20,000 annual savings for 10 years and can be sold for $50,000 at the end of the period, what is the present value of the machine investment at a 9% interest rate with savings realized at year end?
Redbird Company is considering a project with an initial investment of $265,000 in new equipment that will yield annual net cash flows of $45,800 each year over its seven-year life. The companys minimum required rate of return is 8%. What is the internal rate of return? Should Redbird accept the project based on IRR?
Gardner Denver Company is considering the purchase of a new piece of factory equipment that will cost $420,000 and will generate $95,000 per year for 5 years. Calculate the IRR for this piece of equipment. For further Instructions on internal rate of return in Excel, see Appendix C.
Conestoga Plumbing plans to invest in a new pump that is anticipated to provide annual savings for 10 years of $50,000. The pump can be sold at the end of the period for $100,000. What is the present value of the investment in the pump at a 9% interest rate given that savings are realized at year end?
Which offer ha a better market value? Company A offers Php 150,000.00 at end of 3 years plus Php 300,000.00 at the end of 5 years by paying every 6 months. Company B offers Php 25,000.00 at the end of each quarter fot he next 5 years. Assume that the money is worth 10% compounded annually.
Whichoption is better: receive $160,000 now or $50,000, $25,000, $55,000, $30,000, and $40,000,respectively, over the next five years? The cash flows are at the end of each year except for$160,000.Requirements1. Assuming a 6% interest rate, which investment opportunity would you choose?2. If you could earn 10%, would your choice change?3. Assuming a 10% interest rate, what would the cash flow in year 5 have to be in order foryou to be indifferent to the two plans?
You have been offered an investment opportunity that pays $600 every quarter for nine years and paying you $19,000. If you can invest in a similarly rsiy project that gives you a return of 8.4%, what is the current value of the project? A)Less tha $23,000. B)BEtween $23,000 and $23,500 C)Between $23,500 and $24,000 D)Between $24,000 and $24,500 D)Greater than $24,500
You wish to have an investment that will bring about $50 000 in tenyears, and the rate of return is 8% per annum. Required:a. In term of time value of money, what is the amount of $50,000 represent?b. How much do you need to invest now if the rate is compounded annually(to the nearest dollar)?c. If you have $50,000 now and put the sum into a bank account that pays5% per year. How much will you have in 8 years if the rate is compounded semiannually, quarterly, monthly and daily (to the nearest dollar)?
What is the present value if the money become Php158, 900 after 5 years of investment using 11.2% rate?
An investment opportunity requires a payment of $910 for 12 years, starting a year from today. If your required rate of return is 6.5 percent, what is the value of the investment to you today? (Round factor values to 4 decimal places, e.g. 1.2514 and final answer to 2 decimal places, e.g. 15.25.)