FINC 3105 – The cash flows of a project M. Compute the NPV for the project

FINC 3105 – The cash flows of a project M. Compute the NPV for the project

Subject: Business / Finance
Question

1.

You have the following information on the cash flows of a project M. Compute the NPV for the project, if the cost of capital is 14%.
Year Project M
0 ($48,000)
1 17,000
2 18,000
3 21,000
4 21,000
5 55,000
Question 13 options:

$25,936

$22,433

$35,936

$18,530
2.A firm has an issue of $1000 par value bonds with a 8 percent coupon. The issue pays interest annually and has 14 years remaining to its maturity date. If bonds of the same risk are currently earning 10.9 percent, what is the price of the bond? Round it two decimial places, and do not include the $ sign, e.g., 935.67.

3.Colstate Corp. has just paid a dividend (D0) of $3.1 and expects to grow at a constant rate of 6 percent. If your required rate of return is 13 percent, what is the expected price of the stock three years from now (P3)? Round it to two decimal places, e.g., 12.95.

4.

A stock just paid a dividend of $1.03, has a required rate of return of 18%, and a constant dividend growth rate of 5%. What price should this stock be selling for?
$6.57
$8.32
$12.48
$4.24
5.

Bat Company’s BBB 10% bonds have a face value of $1,000 and pay interest semi-annually. They mature in 17 years, and their YTM is currently 14%. What is the price of a Bat Company Bond?
1)

$742.92
2) $555.71
3) $727.98
4)

$861.21
6.Suppose you have just bought a 18-year, 6% semiannual coupon bond. Your purchasing price of the bond implies that the current YTM is 8%. Put the total number of coupon payments during the 18 year period in box 1 below, the dollar amount of each coupon payment in box 2 (do not include the $ sign, and in box 3, put the dollar amount that you will receive at maturity (again do not include the $ sign).
Blank # 1
Blank # 2
Blank # 3
7.Suppose you borrow $24,000 from your bank to buy a car. You agree to pay $463.25 per month for 60 months. What is the APR for the loan?
1)

7.85%
2)

7.28%
3)

6.23%
4)

5.93%

8.What is the present value of a 15-year ordinary annuity with annual payments of $10,000, if the discount rate is 7.0 percent? Round it to two decimal places, and do not include the $ sign or comma, e.g., 123456.45.

9. You need to borrow $52,000 to buy an SUV. The current loan rate is 7.8% compounded monthly and you want to pay the loan off in equal monthly payments over 4 years. How much will your monthly payment be?
1) $809.34
2) $923.15
3) $1,264.60
4)

$1,517.52

10. If you deposit $13,000 at the end of each year for the next 15 years into an account paying 12% interest, how much will you have in the account in 15 years?
1) $358,631
2) $382,863
3) $484,636
4)

$581,56