can you help me with these questions and show me how to solve them??? PLEASE
can you double check my answers.
Problem 5.17
Your finance text book sold 49,000 copies in its first year. The publishing company expects the sales to grow at a rate of 21.0 percent for the next three years, and by 13.0 percent in the fourth year. Calculate the total number of copies that the publisher expects to sell in year 3 and 4. (If you solve this problem with algebra round intermediate calculations to 6 decimal places, in all cases round your final answers to the nearest whole number.)
Number of copies sold after 3 years?
Number of copies sold in the fourth year?
Problem 5.21
Find the present value of $2,500 under each of the following rates and periods. (If you solve this problem with algebra round intermediate calculations to 6 decimal places, in all cases round your final answer to the nearest penny.)
a.8.9 percent compounded monthly for five years.
Present value$
b.6.6 percent compounded quarterly for eight years.
Present value$
c.4.3 percent compounded daily for four years.
Present value$
d.5.7 percent compounded continuously for three years.
Present value$
Problem 6.19
Trigen Corp. management will invest cash flows of $772,380, $776,008, $982,094, $818,400, $1,239,644, and $1,617,848 in research and development over the next six years. If the appropriate interest rate is 9.56 percent, what is the future value of these investment cash flows six years from today? (Round answer to 2 decimal places, e.g. 15.25.)
Future value$
Problem 6.27
You wrote a piece of software that does a better job of allowing computers to network than any other program designed for this purpose. A large networking company wants to incorporate your software into their systems and is offering to pay you $502,000 today, plus $502,000 at the end of each of the following six years for permission to do this. If the appropriate interest rate is 6 percent, what is the present value of the cash flow stream that the company is offering you? (Round answer to the nearest whole dollar, e.g. 5,275.)
Present value$
Problem 7.16
Barbara is considering investing in a stock and is aware that the return on that investment is particularly sensitive to how the economy is performing. Her analysis suggests that four states of the economy can affect the return on the investment. Using the table of returns and probabilities below, find
Probability Return
________________________________________
Boom 0.7 25.00%
Good 0.1 15.00%
Level 0.1 10.00%
Slump 0.1 -5.00%
________________________________________
What is the expected return on Barbara’s investment? (Round answer to 3 decimal places, e.g. 0.076.)
Expected return
Problem 8.24
Trevor Price bought 10-year bonds issued by Harvest Foods five years ago for $976.42. The bonds make semiannual coupon payments at a rate of 8.4 percent. If the current price of the bonds is $1,014.85, what is the yield that Trevor would earn by selling the bonds today? (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and final answer to 2 decimal places, e.g. 15.25%.)
Effective annual yield ____%
Problem 9.15
The First Bank of Ellicott City has issued perpetual preferred stock with a $100 par value. The bank pays a quarterly dividend of $1.65 on this stock. What is the current price of this preferred stock given a required rate of return of 10.0 percent? (Round answer to 2 decimal places, e.g. 15.25.)
Current price $66.00
See previous post: Mon,6:41pm.
Sure! I can help you with these questions and show you how to solve them. Let's go through each problem step by step.
Problem 5.17:
To find the total number of copies sold in year 3, we need to calculate the sales growth for the next three years and add it to the initial sales. Similarly, to find the number of copies sold in the fourth year, we need to calculate the sales growth for that year and add it to the sales in year 3.
Step 1: Calculate the sales growth for the next three years:
Sales in year 2 = Sales in year 1 + (Sales in year 1 * Growth rate)
Sales in year 2 = 49,000 + (49,000 * 0.21)
Sales in year 2 ≈ 59,290
Sales in year 3 = Sales in year 2 + (Sales in year 2 * Growth rate)
Sales in year 3 ≈ 59,290 + (59,290 * 0.21)
Sales in year 3 ≈ 71,870
Step 2: Calculate the sales growth for the fourth year:
Sales in year 4 = Sales in year 3 + (Sales in year 3 * Growth rate)
Sales in year 4 ≈ 71,870 + (71,870 * 0.13)
Sales in year 4 ≈ 81,228
Therefore, the expected number of copies sold in year 3 is approximately 71,870 and the expected number of copies sold in the fourth year is approximately 81,228.
Problem 5.21:
To find the present value of $2,500 under different rates and periods, we can use the present value formula:
Present Value = Future Value / (1 + Rate/Number of periods)^(Number of periods * Frequency)
a) For 8.9 percent compounded monthly for five years:
Present Value = 2,500 / (1 + 0.089/12)^(5 * 12)
Present Value ≈ $1,766.58
b) For 6.6 percent compounded quarterly for eight years:
Present Value = 2,500 / (1 + 0.066/4)^(8 * 4)
Present Value ≈ $1,650.80
c) For 4.3 percent compounded daily for four years:
Present Value = 2,500 / (1 + 0.043/365)^(4 * 365)
Present Value ≈ $2,127.85
d) For 5.7 percent compounded continuously for three years:
Present Value = 2,500 / e^(0.057 * 3)
Present Value ≈ $2,232.59
Therefore, the present values for each scenario are approximately:
a) $1,766.58
b) $1,650.80
c) $2,127.85
d) $2,232.59
Problem 6.19:
To find the future value of the investment cash flows over six years, we can use the future value of an annuity formula:
Future Value = Cash Flow * [(1 + Interest rate)^Number of periods - 1] / Interest rate
Future Value = $772,380 * [(1 + 0.0956)^6 - 1] / 0.0956
Future Value ≈ $1,341,501.00
Therefore, the future value of the investment cash flows six years from today is approximately $1,341,501.00.
Problem 6.27:
To find the present value of the cash flow stream being offered by the company, we can use the present value of an annuity formula:
Present Value = Cash Flow / (1 + Interest rate)^Number of periods
Present Value = $502,000 / (1 + 0.06)^6
Present Value ≈ $2,752,866
Therefore, the present value of the cash flow stream being offered by the company is approximately $2,752,866.
Problem 7.16:
To find the expected return on Barbara's investment, we need to multiply each return by its corresponding probability and sum them up.
Expected Return = (Probability of Boom * Return in Boom) + (Probability of Good * Return in Good) + (Probability of Level * Return in Level) + (Probability of Slump * Return in Slump)
Expected Return = (0.7 * 0.25) + (0.1 * 0.15) + (0.1 * 0.10) + (0.1 * -0.05)
Expected Return ≈ 0.202
Therefore, the expected return on Barbara's investment is approximately 0.202 or 20.2%.
Problem 8.24:
To find the effective annual yield, we can use the following formula:
Effective Annual Yield = [(1 + Yield/2)^(2 * Number of periods) - 1] * 100%
Effective Annual Yield = [(1 + 0.084/2)^(2 * 10/5) - 1] * 100%
Effective Annual Yield ≈ 8.67%
Therefore, the effective annual yield that Trevor would earn by selling the bonds today is approximately 8.67%.
Problem 9.15:
To find the current price of the preferred stock, we can use the dividend discount model formula:
Current Price = Dividend / Required Rate of Return
Current Price = $1.65 / 0.10
Current Price = $16.50
Therefore, the current price of the preferred stock is $16.50.
I hope this helps! Let me know if you have any further questions.