Please answer them correctly. Here are short 3 problems. Please solve all 3 problems. I would...

Free

90.2K

Verified Solution

Question

Finance

Please answer them correctly. Here are short 3 problems. Pleasesolve all 3 problems. I would really appreciate your effort.Thanks.
1. Cullumber Corp had sales of $336,000 in 2017. If managementexpects its sales to be $476,450 in 6 years, what is the rate atwhich the company’s sales are expected to grow? (If yousolve this problem with algebra round intermediate calculations to4 decimal places, in all cases round your final answer to 2 decimalplaces, e.g. 8.72%.)
Growth Rate ___?
2. Ivanhoe, Inc., management expectsthe company to earn cash flows of $12,700, $15,100, $18,200, and$19,500 over the next four years. If the company uses an 9 percentdiscount rate, what is the future value of these cash flows at theend of year 4? (Round answer to 2 decimal places, e.g.15.25. Do not round factor values.)
Future Value $_?
3. Jason Allen borrowed some money from his friend and promisedto repay him $1,230, $1,330, $1,550, $1,620, and $1,620 over thenext five years. If the friend normally discounts investment cashflows at 7.5 percent annually, how much did Jason borrow?(Round answer to 2 decimal places, e.g. 15.25. Do notround factor values.)
Present value $___?

Answer & Explanation Solved by verified expert

4.4 Ratings (874 Votes)

1)	Growth rate	5.99%

Working:
	Future value		=	Present Value *(1+i)^n	Where,
	$ 4,76,450		=	336000*(1+i)^6	i	Growth rate
	1.4180		=	(1+i)^6	n	time
	1.4180	^ (1/6)	=	1+i
	1.0599		=	1+i
	i		=	0.0599

2)	Future value		$ 73,725.18

Working:

Year	Cash flows	Future value of 1	Future value of cash flows
a	b	c=1.09^(4-a)	d=b*c
1	$ 12,700	1.295	$ 16,446.87
2	$ 15,100	1.188	$ 17,940.31
3	$ 18,200	1.090	$ 19,838.00
4	$ 19,500	1.000	$ 19,500.00

	Total		$ 73,725.18

3)	Present value		$ 5,884.25

Working:

Year	Cash flows	Present value of 1	Present value of cash flows
a	b	c=1.075^-a	d=b*c
1	$ 1,230	0.930233	$ 1,144.19
2	$ 1,330	0.865333	$ 1,150.89
3	$ 1,550	0.804961	$ 1,247.69
4	$ 1,620	0.748801	$ 1,213.06
5	$ 1,620	0.696559	$ 1,128.42

	Total		$ 5,884.25

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

Please answer them correctly. Here are short 3 problems. Pleasesolve all 3 problems. I would really appreciate your effort.Thanks.1. Cullumber Corp had sales of $336,000 in 2017. If managementexpects its sales to be $476,450 in 6 years, what is the rate atwhich the company’s sales are expected to grow? (If yousolve this problem with algebra round intermediate calculations to4 decimal places, in all cases round your final answer to 2 decimalplaces, e.g. 8.72%.)Growth Rate _____?2. Ivanhoe, Inc., management expectsthe company to earn cash flows of $12,700, $15,100, $18,200, and$19,500 over the next four years. If the company uses an 9 percentdiscount rate, what is the future value of these cash flows at theend of year 4? (Round answer to 2 decimal places, e.g.15.25. Do not round factor values.)Future Value $_____?3. Jason Allen borrowed some money from his friend and promisedto repay him $1,230, $1,330, $1,550, $1,620, and $1,620 over thenext five years. If the friend normally discounts investment cashflows at 7.5 percent annually, how much did Jason borrow?(Round answer to 2 decimal places, e.g. 15.25. Do notround factor values.)Present value $_____?