Time value of money

1.) Yield to Maturity =├ ( (Face Value)/(Current Price of Bond)┤)^(1/(Years to Maturity))-1 a) r =├ ( $1000/$800┤)^(1/1)-1= 0.25 = 25% b) r =├ ( $100/$950┤)^(1/1)-1= 0.053 = 5.3% c) r =├ ( $1000/$1000┤)^(1/1)-1=0 = 0% The yield to maturity may change over the years depending on the changes in the overall demand for bonds in the market. If the investors become more willing to hold bonds due to economic uncertainty, then the bond prices will rise which will reduce the yield (Ross, 2016). In this…

because by the time I will retire I do not believe that Social Security will still exist. Therefore, my answer for Step 3 is 0. Step 4: The job I currently have does not offer a DB pension; therefore, my answer for Step 4 is 0. Step 5: I have a Traditional IRA, it is currently worth $11,935.35. My IRA is invested…

investment funds to figure their time value of money. I would need to know the education costs as well as in estimated annual inflation percentage rate. I would also weight the options and research low interest rate student loans versus overextending my finances. Secondly, we know the amount the medical facility costs each month, as well as the estimated annual increase; however, how much is Fran’s mother contributing? Lastly, the Blake’s are considering accessing some money from their…

The current value of the EE Savings Bonds is $ 107,401. At the end of 2015, the Wal-Mart raised the federal fund's rate to 0.25 percent. Whether this is the first of many rate increases in 2016 remains to be seen, because there are so many factors at play on each side…

the current and potential profitability of a company to measure its fair market value. Based on the results of analysis, financial analysts can then make informed, accurate decisions on whether to sell, hold or buy a stock. There are alternative measures on how to value a company. Quantitative tools such as the dividend discount model and the relative valuation method are most commonly used to measure the ongoing value of the firm and emphasizing some of their limitations (Bodie, Kane, & Marcus,…

premiums and don’t reduce the death benefit. This will run the cash value of the policy to zero in 5 years, but the viatical settlement would be worth $475,000 at that time. If he died within 5 years, the beneficiaries would receive $1 million. Ultimately, the decision rests on the individual on what they perceive as best for themselves. The values that will affect the value of the viatical settlement are the discount rate, the face value of the policy, and the health of the individual selling…

bottling machines with a newer and more efficient one. The old machine has a book value of $400,000 and a remaining useful life of five years. The salvage value of the old machine (for depreciation and cash flow purposes) is $50,000. The firm can sell it now to another firm in the industry for $200,000. The new machine has a purchase price of $1.2 million, an estimated useful life of five years, and an estimated salvage value in five years of $20,000. Additional costs of installation will…

2.2. Corporate value theories 2.2.1. Valuation David Frykman (2003) identified three bases of valuation, including cash flow, return and operational variables. Thus, a great number of valuation approach such as EVA and DDM can be used under certain conditions. However, the most common valuation approach is the discounted cash flow model(DCF). It considers perspectives of all claimholders in the company. Economists define the corporate value as the present value of expected free cash flow of…

at the last minute coincides with my grandma’s experiences as well. My grandma did not always think that moving to Canada was a good idea. Back in Sri Lanka, my grandmother did not have enough money to advance her children's education to the fullest of their abilities. She thought about investing all her money and moving away to Canada but did not think it was worth it. In 1983, a civil war broke out in Sri Lanka between the Tamil people and the Sinhalese people over equality and human rights.…

business account without permission, which should be returned to her; 2. She agrees that the husband shall transfer the titles of 2 cars to the Wife because the Wife paid 2 cars, but only used your client's name because she did not have credit at the time, which should be hers; 3. The House located at 515 Slash Circle, Midway, FL 32343: This house was purchased in 2006 for $170,000.00 under your client's name, but it is a marital property; the wife wants the husband to transfer the title to…