Answer on this exam paper $$ select the clearly circle the correct response. Financial calculators can be used. A$)(5$ marks$)$ Todd can afford to pay $$400$ per month for the next $6$ years in order to purchase a new car. The interest rate is $7$ percent compounded monthly. What is the most he can afford to pay for a new car today? a$)$ $$23,461\mathrm{.}78.$ b$)$ $$35,664\mathrm{.}38.$ c$)$ $$22,288\mathrm{.}69.$ d$)$ $$23,198\mathrm{.}64.$ e$)$ $$24,243\mathrm{.}84$ b$)(5$ marks$)$ Alex wants to have $$50,000$ saved up for a down payment on a house in $10$ years. If he can find an investment that offers an annual interest rate of $4\%,$ compounded annually, how much does he need to invest today to reach his goal in $10$ years? $($select the exact option or the closest value$).($If using PV factor: $1\mathrm{.}4802444)$ Options: A$)$ $$33,643\mathrm{.}70.$ B$)$ $$36,785\mathrm{.}12.$ C$)$ $$38,942\mathrm{.}59.$ D$)$ $$40,241\mathrm{.}76$ c$)(5$ marks$)$ Leo is planning for his child's college education. He estimates that college will cost $$200,000$ in $15$ years. If he can secure an investment that offers an annual interest rate of $3\%,$ compounded annually, how much does he need to invest today to have the required amount in $15$ years? $($select the exact option or the closest value$)($PV Factor if using: $1\mathrm{.}5797825)$ Options: A$)$ $$126,602\mathrm{.}74.$ B$)$ $$132,675\mathrm{.}50.$ C$)$ $$138,292\mathrm{.}91.$ D$)$ $$142,486\mathrm{.}25$ Rough work Include rough work here $$ if using formula $8$ d$)(5$ marks$)$ Ramon is considering an investment that promises to pay him $$5,000$ at the end of the first year, $$6,000$ at the end of the second year, and $$7,000$ at the end of the third year. If the discount rate $($interest rate$)$ is $4\%$ compounded annually, What is the Present Value $($PV$)$ of these cash flows? $($select the exact option or the closest value$)$ PV Factors: $1$ year $(1\mathrm{.}04),2$ years $(1\mathrm{.}0816)3$ years $(1\mathrm{.}124864)$ Options: A$)$ $$16,573\mathrm{.}04$ B$)$ $$17,521\mathrm{.}44.$ C$)$ $$18,007\mathrm{.}68.$ D$)$ $$19,234\mathrm{.}56$ Rough work $9$ Section $3(50$ marks$)$ Technical and ESG Questions Question $1(20$ marks$)$ Mendez Co$.$ has identified an investment project with the following cash flows. You can solve these questions with either your financial calculator, formula or by PV factors. Year Cash flow $1$ $$470261037354920(5$ marks$)$ If the discount rate is $10$ percent, what is the present value of these cash flows? PV factors if using: yr$11\mathrm{.}10,$ yr$21\mathrm{.}21$ yr $31\mathrm{.}331$ yr $41\mathrm{.}4641(5$ marks$)$ What is the present value at $18$ percent? PV factors if using: yr $11\mathrm{.}18,$ yr$21\mathrm{.}3924,$ yr$31\mathrm{.}64352$ yr $41\mathrm{.}9388969(5$ marks$)$ What is the present value at $24$ percent? PV factors if using: yr $11\mathrm{.}24,$ yr$21\mathrm{.}5376$ yr$31\mathrm{.}90549504$ yr $42\mathrm{.}3642148510(5$ marks$)$ Based on the above question, what relationship does the discount rate have with the PV$?$ Question $2(10$ marks$)$ Operating Cash Flow Graff, Inc., has sales of $$49,800,$ costs of $$23,700,$ depreciation expense of $$2,300,$ and interest expense of $$1,800.$ If the tax rate is $22$ percent, what is the operating cash flow, or OCF? Answer: Question $3(20$ marks$)$ ESG and Impact on Financial Management $(5$ marks$)$ Briefly explain ESG. $($point form is acceptable$)(15$ marks$)$ ESG role in Finance $($point form is acceptable$)$ Criteria Discuss ESG Role in Financial Management Societal Impact Risk Management Performance and Profitability Stakeholder Demand