公司财务管理练习题.ppt

Nov.29, 2011 Review the time value of money Question 1 The following cash flows streams need to be analyzed End of year 1 2 3 4 5 W $100 $200 $200 $300 $300 X 600 - - - - Y - - - - 1200 Z 200 - 500 - 300 a. Calculate the future value of each stream at the end of year 5 with a compound annual interest rate of 10%(equation 4.3 on P89) b. Compute the present value of each stream if the discount rate is 14% (equation 4.4 on the same page) Question 2 Muffin Megabucks is considering two different savings plans. The first plan would have her deposit $500 every six months, and she would receive interest at a 7% percent annual rate, compounded semiannually. Under the second plan she would deposit $1000 every year with a rate of interest of 7.5% percent, compounded annually. The initial deposit with Plan 1 would be made six months from now and, with plan2, one year hence. a. What is the future value of the first plan at the end of 10 years? b. What is the future value of the second plan at the end of 10 years? c. What plan should Muffin use, assuming that her only concern is with the value of her savings at the end of 10years? d. Would your answer change if the rate of interest on the second plan were 7 percent? Question 3 On a contract you have a choice of receiving $25000 six years from now or $500000 twelve years from now. at which compound annual interest rate should your be indifferent between the two contracts? Question 4 Emerson Cammack wishes to purchase an annuity contract that will pay him $7000 a year for the rest of his life. The Philo life insurance Company figures that his life expectancy is 20 years, based on its actuary tables. The company imputes a compound annual interest rate at 6 percent in its annuity contracts. a.