1- 

Determine the compound interest earned on an investment of € 12,000 for 20 years at a nominal rate of X% compounded with frequencies  m=365 and continuous. Which one is better?

X is the month you were born. For example if you were born in May, then X= 5%, if you were born in January then X= 1% , etc. 

2-   Calculate the present value of 6 annual payments of 50,000 € each, at the end of the year, if the interest rate is an annual X% compound .

X is the month you were born. For example if you were born in May, then X= 5%, if you were born in January then X= 1% , etc. 

3- Construct a 20 year ammortization table for a loan to buy a car for € 50,000


X is the month you were born. For example if you were born in May, then X= 5%, if you were born in January then X= 1% , etc. 


a) Use Italian Method
b) Use French Method
c) The X interest rate changes to X+1 after 12 years. Reconstruct using French Method.
4- Charlie is the owner of Saratoga Restaurant Row, a
fast-food located in the Courtyard, just east of the Paddock area, where five
local restaurants serve some of their best recipes. He has a four years left
concession on the restaurant, and he is not sure if the contract is going to be
renewed.


 


Because there is a lot of demand, not only for the
people coming to the restaurant, but also for the picnic tables that can be
reserved. For that reason, Charlie has developed three different proposals to
take this opportunity and increase profits.


 


The first alternative is to open a new window. The
second alternative is based on the renovation of the existing equipment to be
more efficient. These two alternatives are not mutually exclusive, having
Charlie the possibility of taking both. The last alternative is based in
abandoning the current space to build a new one.


 


Charlie thinks that the opportunity cost of capital
for those investments is an annual XX%. The incremental cash flows associated
with each proposal are:


 
X is the month you were born. For example if you were born in May, then X= 5%, if you were born in January then X= 1% , etc. 

 

Project                                        Investment     Year 1       Year 2       Year 3       Year 4



Open a new window            -$100.000         $35.000     $35.000      $35.000    $35.000



Renovation
of equipment   -$60.000         $20.000       $20.000      $20.000   $20.000



Build a new space            -$160.000        $60.000       $60.000      $60.000    $60.000



1.   Based on the IRR criteria, which
alternative(s) does Charlie have to choose?


2.   Based on the NPV criteria, which
alternative(s) does Charlie have to choose?
   

Answer rating: 100% (QA)

Thank you for providing the value of X Based on your birth month May X is 5 Now lets calculate the values and answer your questions 1 Compound interest earned on an investment of 12000 for 20 years at ... View the full answer