Question: please help out for these Q1 (a),(b),(c),(d) & Q2 1. Sam's friend Kate has worked in IT for a bit over a decade. Kate has

 please help out for these Q1 (a),(b),(c),(d) & Q2 1. Sam's

please help out for these Q1 (a),(b),(c),(d) & Q2

1. Sam's friend Kate has worked in IT for a bit over a decade. Kate has suggested Sam add a repair and support service to his business, and Kate would be willing to run this new part of the business. Sam is interested in this proposition, but needs to do some calculations to see if it is financially worthwhile. He has asked around and gathered the following information made the following assumptions: Sam will consider this repair and support service only over the next three years (i.e. he will assume this service and any associated cash flows will only last 3 years) The start-up cost (buying new equipment, advertising, etc.) will be $30,000, payable immediately. Sam would like to compensate Kate for his time over the coming 3 years (with something other than "exposure"!). He believes that $240 per week would be a reasonable amount (this is not a full-time commitment of Kate's time after all). The first such payment would be today. Sam would need a return of at least 13.3% p.a. effective for this proposition to be worthwhile. (a) Calculate the equivalent effective weekly rate that Sam would need to earn. Give your answer as a percentage to 4 decimal places. (6) Using your answer from part a), calculate the present value of the compensation Sam will pay Kate over the coming 3 years. Give your answer to the nearest cent. Due to various factors, such as time needed to perform repairs and clients taking time to send through payments, Sam believes that the money from this this repair and support service will be receivable quarterly. The first payment will be received exactly 6 months (i.e., half a year) from today, the final payment will be received exactly 3 years from today. He also believes these payments will be a level amount each quarter. (c) Calculate the effective quarterly rate that Sam would need to earn. Give your answer as a percentage to 4 decimal places. (d) Ignoring the compensation, he is paying to Kate (i.e., only considering the start-up cost of $30,000). calculate the level quarterly payment he would require to make this new service worthwhile. Give your answer to the nearest cent. 2. Sam decides to go through with setting up this repair and support service. However, it turns out that some of his estimates above were not accurate: . The estimated start-up cost of $30,000 was correct. The first level quarterly payment Sam receives will be exactly 3 months from the start of this service (and not 6 months as Sam estimated). However, the level quarterly payment Sam would receive is more likely to be 2867.4955868379. These quarterly payments are still expected to only last for 3 years. . . Again, ignoring the compensation he is paying to Kate, determine the return Sam is earning on this repair and support service, expressed as a nominal annual rate compounding quarterly. Give your answer as a percentage to 4 decimal places

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