Ask Question, Ask an Expert


Ask Basic Finance Expert

problem 1: Your father has $500,000 invested at 8%, and he now wants to retire. He wants to withdraw $50,000 at the starting of each year, beginning instantly. How many years will it take to exhaust his funds, that is, run the account down to zero?

a) 11.34 years
b) 18.49 years
c) 17.54 years
d) 13.91 years
e) 15.27 years

problem 2: What is the present value of a 6-year ordinary annuity of $1,000 per year plus an additional $1,500 at the end of Year 6 if the interest rate is 6%?

a) $5,324.89
b) $5,591.45
c) $5,974.77
d) $6,011.87
e) $4,854.13

problem 3: When a bank pays a 6% nominal rate, with monthly compounding, on deposits, what efficient annual rate does the bank pay?

a) 6.17%
b) 6.71%
c) 5.10%
d) 6.59%
e) 5.91%

problem 4: You are buying your first house for $220,000 and are paying $30,000 as a down payment. You have arranged to finance the remaining $190,000 30-year mortgage with 7% nominal interest rate and monthly payments.

Determine the equal monthly payments you should make?

a) $1,513
b) $1,110
c) $1,264
d) $1,976
e) $1,349

problem 5: Companies produce income from their ‘regular’ operations and from things such as interest on securities they hold, that is termed non-operating income. Mitel Metals recently reported $9,000 of sales, $6,000 of operating costs other than depreciation and $1,500 of depreciation. The company had no amortization charges and no non-operating income. It had issued $4,000 of bonds which carry a 7% interest rate, and its federal-plus-state income tax rate was 40%. Determine the firm's operating income or EBIT?

a) $1,100
b) $1,200
c) $1,300
d) $1,400
e) $1,500

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M97079

Have any Question? 

Related Questions in Basic Finance

Your firm is considering a new investment proposal and

Your firm is considering a new investment proposal and would like to calculate its weighted average cost of capital. To help in this, compute the cost of capital for the firm for the following: a. A bond that has a $1000 ...

Smart analysts can massage the numbers in npv analysis to

Smart analysts can massage the numbers in NPV analysis to make any project's NPV look positive. It is better to use a simpler approach like payback or accounting rate of return that gives analysts fewer degrees of freedo ...

Taxable income- nick is married and has three children in

Taxable Income:- Nick is married and has three children in college. His wife is a homemaker. Nick has an adjusted gross income of $37,400. If Nick's standard deduction is $11,900, his itemized deductions are $12,200, and ...

Writing assignmentthe capital budgeting decision techniques

Writing Assignment: The capital budgeting decision techniques discussed so far all have strengths and weaknesses; however, they do comprise the most popular rules for valuing projects. On the other hand, valuing an entir ...

Question 1 when ranking security returns from highest

Question 1. When ranking security returns from highest return to lowest return, the data shows that the annualized returns are as follows: Large stocks, small stocks, long-term corporate bonds, long-term government bonds ...

An investment costs 875000 today and is expected to produce

An investment costs $875,000 today and is expected to produce a one-time inflow at the end of year 8 of $1,430,000. What is the IRR of this project?

If brads stocks double in value over the next five years

If Brad's stocks double in value over the next five years, what annual return would he realize? (Hint: Use the future value table in Appendix C.) Based on his projected annualized return, would it be advisable to sell th ...

Create a 10-15-slide powerpoint presentation demonstrating

Create a 10-15-slide PowerPoint presentation demonstrating a thorough understanding of the firm you have been evaluating through the class. Be sure to include speaker notes at the bottom of each slide that provide more d ...

1 what are transition economies what are some of the

1. What are transition economies? What are some of the important changes occurring in transition economies? 2. Discuss some of the major legal systems that exist around the world. What are some of the most important diff ...

Writing in new york magazine sheelah kolhatkar asks an

Writing in New York magazine, Sheelah Kolhatkar asks an intriguing question: A couple of weeks ago, for instance, the investment-management company Vanguard released data showing that men were more likely than women to s ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro