Franz has an investment worth 142,067 dollars. The investment will make a special payment of X to Franz in 3 quarters in addition to making regular quarterly payments to Franz forever. The first regular quarterly payment to Franz is expected to be 1,540 dollars and will be made in 3 months. All subsequent regular quarterly payments are expected to increase by 0.88 percent per quarter forever. The expected return for the investment is 2.02 percent per quarter. What is X, the amount of the special payment that will be made to Franz in 3 quarters?

Question 14

You own two investments, A and B, that have a combined total value of 67,967 dollars. Investment A is expected to make its next payment in 1 month. A’s next payment is expected to be 374 dollars and subsequent payments are expected to grow by 0.49 percent per month forever. The expected return for investment A is 1.11 percent per month. Investment B is expected to pay 159 dollars each quarter forever and the next payment is expected in 3 months. What is the quarterly expected return for investment B? Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.

Question 16

Oxygen Optimization just bought a new filtration system for 242,500 dollars. To pay for the filtration system, the company took out a loan that requires Oxygen Optimization to pay the bank a special payment of 108,500 dollars in 3 year(s) and also make regular annual payments forever. The first regular payment is expected in 1 year and is expected to be 2,000 dollars. All subsequent regular payments are expected to increase by a constant rate each year forever. The interest rate on the loan is 16.71 percent per year. What is the annual growth rate of the regular payments expected to be? Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.

Question 19

What is the value of an investment that will pay investors 8,740 dollars per year for 6 years and will also pay investors an additional 3,210 dollars in 1 year(s) from today if the expected return for the investment is 3.56 percent per year and the first annual payment of 8,740 dollars will be paid to investors in one year from today?

Answer rating: 100% (QA)

To calculate the amount of the special payment X that will be made to Franz in 3 quarters we need to determine the present value of all future regular quarterly payments and the special payment Lets b... View the full answer