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Do b only
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- Maryam's retirement scheme is in such a way that for the present year, she invests QR 250,000 (as Present Cash outflow) and she expects of the asset of QR 700,000 (Cash inflow) over 20 years. Assuming no deposits (A) made to his retirement account over the aforementioned 20 year period, what annual rate of return did she make? Hint: You may use RATE function in MS Excel to calculate the annual rate of return. 8.00% 4.22% 3.13% 5.28%A man will buy a house and lot worth P 300,000 in a subdivision in Metro Manila. His carrying charges is P 34,200 to the price of this house and lot. Further he will be obliged to pay it over a period of 20 years. Through his monthly amortization does not look much as a burden to his income, what is the annual rate? Oi- 9.567% Oi- 9% O i= 10% Oi- 9.50%Mr. chan wants to purchase a house after a couple of years. his target house value is P4,975,193. He decides to invest in a product where he can deposit yearly P592796 starting at the beginning of each year until year 13. he wants to know what is the present value of the annuity investment that he is doing. this would enable him to know what the true cost of the property in today's term is. you are required to do the calculation of the present value of the annuity due that mr. chan is planning to make. assume that the rate earned on investment will be 9.87%. Write your answer in two decimal places
- Each of the following situations is independent. Work out your own solution to each situation, and thencheck it against the solution provided.1. John plans to retire in 12 years. Upon retiring, he would like to take an extended vacation, which heexpects will cost at least $40,000. What lump-sum amount must he invest now to have $40,000 at theend of 12 years if the rate of return is:a. Eight percent?b. Twelve percent?Stan Marsh, an investor, is considering two financing plans for purchasing a parcel of real estate costing $152,264. Alternative 1 involves paying cash; alternative 2 involves obtaining 82% financing at 9.4% interest. If the parcel of real estate appreciates in value by $17,153 in 1 year, calculate (a) Stan's net return and (b) his return on equity for each alternative. If the value dropped by $17,153, what effect would this have on your answers to parts a and b?D4) Bob buys a property that costs $1,000,000. The property is projected to generate NOI as follows: Year NOI 1 $100,000 2 $105,000 3 $110,000 Bob will own the property for two years. Bob will sell the property at the end of year 2 at a cap rate that is 250 basis points lower than the cap rate at which he bought the property. What is Bob’s annualized IRR for the investment in question A. 26.21% B. 14.89% C. 30.47% D. 27.78%
- Danny creates up an investment arrangement for friend that will return $5000 the first year,$6125 the second year, $7250 the third year, and so on, for 30 years.State appropriate formulaeand determine, how much will the investment yield altogether?Your aunt offers you a choice of $21,200 in 20 years or $670 today. Use Appendix B as an approximate answer, but calculate your final answer using the formula and financial calculator methods. a-1. If money is discounted at 19 percent, what is the present value of the $21,200? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Present value a-2. Which offer should you choose? O $21,200 in 20 years O $670 today Prav 3 of 10 NextYou can buy property today for $2.1 million and sell it in 6 years for $3.1 million. (You earn no rental income on the property.) a. If the interest rate is 11%, what is the present value of the sales price? (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.) b. Is the property investment attractive to you? c-1. What is the present value of the future cash flows, if you also could earn $110,000 per year rent on the property? The rent is paid at the end of each year. (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.) c-2. Is the property investment attractive to you now?
- Curly's Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $25,000 per year forever. Assume the required return on this investment is 6 percent. Required: How much will you pay for the policy? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Policy value todayBased on the cases provided. calculate the income received: i) Mrs. S owns a freehold property in Jurong East, Singapore. She receives an income of dollar 24,000 every year for 9 years from her rented property. Market rental is anticipated to increase to dollar 12,500 per month in the 10th year. Calculate the market value when the required rate of return is 7% per annum. 2. ii) Mrs. Kobe owns 2 acres of freehold commercial land in New Jersey. She leased the land to Mr. Chris at a dollar of 120,000 per acre/per annum for a period of 15 years. Mr. Chris then sub-leased the land to Mr. Shang Chi for a period of 10 years with a rate of payment at dollar 50,000 per acre/per annum. The rate of return for the same properties is 7% per annum and sinking fund at 3%. Estimate the income gathered from this investment to Mrs. Kobe and Mr. Chris. 3. iii) XXX landlord needs a dollar of 250,000 to refurbish a condominium in five years' time. He will save money from rental income (paid monthly…Your uncle offers you a choice of $106,000 in 10 years or $43,000 today. Use Appendix B as an approximate answer, but calculate your final answer using the formula and financial calculator methods. a-1. If money is discounted at 9 percent, what is the present value of the $106,000? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Present value a-2. Which offer should you choose? $106,000 after 10 years O $43,000 today