They want to invest around $50,000 and they are expecting good growth in the next 5 years. As they plan to take one more Condo house after 5 years from now. How do you advise them on various investing instruments, which you learnt in the class and how much can they expect after 5 years. They are medium
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- you are planning to start a business with an initial capital of P100,000. you decided to put up a fund with deposits made at the end of each month. if you want to gain the initial capital after 4 years, how much monthly deposit must be made? what should be the interest rate in order to achieve the possible amount needed? how are you going to invest your money that in short period of time so that you can start your business smoothly?You are thinking about investing $4,692 in your friend's landscaping business. Even though you know the investment is risky and you can't be sure, you expect your investment to be worth $5,738 next year. You notice that the rate for one-year Treasury bills is 1%. However, you feel that other investments of equal risk to your friend's landscape business offer an expected return of 8% for the year. What should you do?.1. What are the differences between annuity and PV or FV? 2. You are given two numbers: Smith wants to receive $10,000 a year for next 5 years; Smith wants to have $60,000 in 5 years. Which keys you should use to represent 10,000 and 60,000, respectively? 3. You are given two numbers: Lisa is to invest $5,000 a year in a mutual fund for next 5 years; Lisa invests $20,000 in IBM stock. Which keys you should use to represent 5,000 and 20,000, respectively?
- You are thinking about investing $4,865 in your friend's landscaping business. Even though you know the investment is risky and you can't be sure, you expect your investment to be worth $5,744 next year. You notice that the rate for one-year Treasury bills is 1%. However, you feel that other investments of equal risk to your friend's landscape business offer an expected return of 7% for the year. What should you do? The present value of the return is $_______ (Round to the nearest cent.)Q1, Victor and Maria Hernandez Wonder About Investing Victor and Maria have decided to increase their contribution to their investment portfolio since Victor is now age 59 and thinking about retiring in five years. For years, they have followed a moderate-risk investment philosophy and put their money in suitable stocks, bonds, and mutual funds. The value of their portfolio is now $420,000, and this is in addition to their paid-for rental property, which is worth $300,000. They plan to invest about $12,000 every year for the next five years. 1, Why should Victor and Maria consider buying common stock as an investment with the additional money? Why or why not? 2, Maria bought a stock with a market price of $50 and a beta value of 1.9, what would be the likely price of an $12,000 investment after one year if the general market for stocks rose 5 percent? Round your answer to the nearest dollar. Do not round intermediate calculations. 3, What would the same investment be worth if the…Your business finance course has motivated you to begin investing for retirement in your company's 401K plan. Your first $370 monthly investment will be made one month from today and you plan to retire 43 years from today. How much more will you have to invest each month, if you wait for 15 years before starting to invest to end up with the same amount of money at retirement? Assume a rate of return of 0.60 percent per month for your investments. Group of answer choices $1,196.80 $902.79 $826.81 $527.88 $611.34
- A.You just inherited some money, and a broker offers to sell you an annuity that pays $16,800 at the end of each year for 20 years. You could earn 5% on your money in other investments with equal risk. What is the most you should pay for the annuity? a. $209,365.13 b. $180,054.02 c. $255,425.46 d. $244,957.21 e. $236,582.60 B. New Business is just being formed by 10 investors, each of whom will own 10% of the business. The firm is expected to earn $1,000,000 before taxes each year. The corporate tax rate is 34% and the personal tax rate for the firm's investors is 35%. The firm does not need to retain any earnings, so all of its after-tax income will be paid out as dividends to its investors. The investors will have to pay personal taxes on whatever they receive. How much additional spendable income will each investor have if the business is organized as a partnership rather than as a corporation? a. $20,332 b. $19,006 c. $22,763…Now consider your financial objective is to save $500,000 for preparing your retirement, assuming 30 years from now. If you invest your RRSP savings in a mutual fund which can realize an average return of 10% per year. To achieve your goal, how much do you need to save at the end of each year over the 30-year period? a. 4,039.26 b. 3,039.62 c. 2,985.54 d. 10,988.32 What is the FV of $100 deposited today into an account with an APR 12.6%, compounded semiannually for 10 years? a. 1478.96 b. 3460.06 c. 327.63 d. 339.36 A car dealer offers payment of $525.32 per months for 60 months on a $30,000 car after making a $5000 down payment. What's the loan's APR? a. 10.4798% b. 9.5224% c. 1.9609% d. 0.7935%Your organization has been asked to invest in a continuing care retirement center. Your investment will be $600,000 per year for the next 5 years. After 5 years, cash flows will be $400,000 per year for the next 15 years. If your discount rate is 10%:(a) what is the present value of the investment?(b) what is the present value of the cash flows?(c) what is the profitability index?
- a) As an investment advisor, you have been approached by a client called Mr. Sobolo, who wants some help in investment-related matters.Mr. Sobolo is currently 45 years old and has Gh₵600,000 in the bank. He plans to work for 15 more years and retire at the age of 60. Mr. Sobolo's present salary is Gh₵ 400,000 per year. He expects his salary to increase at the rate of 12 per cent per year until his retirement.Mr. Sobolo has decided to invest his bank balance and future savings in a portfolio in which stocks and bonds would be equally weighted. For the sake of simplicity, assume that these proportions will be maintained by him throughout. He also believes that bonds would provide a return of 7 per cent and stocks a return of 13 per cent. You concur with his assessment.Once Mr. Sobolo retires at the age of 60 he would like to withdraw Gh₵500,000 per year from his investments for the following 15 years as he expects to live up to the age of 75 years. He also wants to bequeath Gh₵ 1,000,000…A financial manager wants to invest $50,000 for a client by putting some of the money in a low-risk investment that earns 5% per year and some of the money in a high-risk investment that earns 14% per year. How much money should she invest at each interest rate to earn $5000 in interest per year?You want to start saving for your first car which costs R300 000. You decide to save by investing in an equity index for 5years. You know that you will receive R25000 from your graduate program next year so you decide that you will invest R2500 a month into the index for 5 years. If the equity index has a beta of 0.9, the current annual treasury bill rate is 4.15% and the JSE(ALSI) earns 9.4% annually, will you be able to afford your car at the end of your investment period?