## FINANCE-The publishing company expects the sales to grow at a rate

Problem 5.17

Your finance text book sold 55,000 copies in its first year.

The publishing company expects the sales to grow at a rate of 20.0 percent for

the next three years, and by 13.0 percent in the fourth year. Calculate the

total number of copies that the publisher expects to sell in year 3 and 4. (If

you solve this problem with algebra round intermediate calculations to 6

decimal places, in all cases round your final answers to the nearest whole

number.)

Number of copies sold after 3

years?

Number of copies sold in the fourth year?

Problem 5.21

Find the present value of $3,300 under each of the following

rates and periods.

(If you solve this problem with algebra round intermediate

calculations to 6 decimal places, in all cases round your final answer to the

nearest penny.)

a. 8.9 percent compounded monthly for five years.

Present value $

b. 6.6 percent compounded quarterly for eight years.

Present value $

c. 4.3 percent compounded daily for four years.

Present value $

d. 5.7 percent compounded continuously for three years.

Present value $

Problem 6.19

Trigen Corp.

management will invest cash flows of $528,605, $523,683, $759,897, $818,400,

$1,239,644, and $1,617,848 in research and development over the next six years.

If the appropriate interest rate is 6.21 percent, what is the future value of

these investment cash flows six years from today? (Round answer to 2 decimal

places, e.g. 15.25.)

Future value $

Problem 6.27

You wrote a piece of software that does a better job of

allowing computers to network than any other program designed for this purpose.

A large networking company wants to incorporate your software into their

systems and is offering to pay you $486,000 today, plus $486,000 at the end of

each of the following six years for permission to do this. If the appropriate

interest rate is 7 percent, what is the present value of the cash flow stream

that the company is offering you? (Round answer to the nearest whole dollar,

e.g. 5,275.)

Present value $

Problem 7.16

Barbara is considering investing in a stock and is aware

that the return on that investment is particularly sensitive to how the economy

is performing. Her analysis suggests that four states of the economy can affect

the return on the investment. Using the table of returns and probabilities

below, find

Probability Return

Boom 0.4 25.00%

Good 0.3 15.00%

Level 0.1 10.00%

Slump 0.2 -5.00%

What is the expected return on Barbaraâs investment? (Round

answer to 3 decimal places, e.g. 0.076.)

Expected return.

Problem 8.24

Trevor Price bought 10-year bonds issued by Harvest Foods

five years ago for $935.11. The bonds make semiannual coupon payments at a rate

of 8.4 percent. If the current price of the bonds is $1,045.86, what is the

yield that Trevor would earn by selling the bonds today? (Round intermediate

calculations to 4 decimal places, e.g. 1.2514 and final answer to 2 decimal

places, e.g. 15.25%.)

Effective annual yield %

Problem 9.15

The First Bank of Ellicott City has issued perpetual preferred

stock with a $100 par value. The bank pays a quarterly dividend of $1.65 on

this stock. What is the current price of this preferred stock given a required

rate of return of 10.0 percent? (Round answer to 2 decimal places, e.g. 15.25.)

Current price $

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