I need help with requirement 6, Attached are also the related tables/ More Info
ID: 2535183 • Letter: I
Question
I need help with requirement 6, Attached are also the related tables/
More Info 1. Charlie just hit the jackpot in Las Vegas and won $30,000! If he invests it now, at a 14% 2. Roderick would like to have $3,000,000 saved by the time he retires in 40 years. How much 3. Assume that Penny accumulates savings of $2 million by the time she retires. If she invests interest rate, how much will it be worth fifteen vears from now? does he need to invest now at a 10% interest rate to fund his retirement goal? this savings at 12%, how much money will she be able to withdraw at the end of each year 4. Hannah plans to invest $3,000 at the end of each year for the next eight years. Assuming a 5. Assuming a 6% interest rate, how much would Rachel have to invest now to be able to 6. Darren is considering a capital investment that costs $500,000 and will provide the following for fifteen years? 14% interest rate, what will her investment be worth eight years from now? withdraw $12,000 at the end of every year for the next nine years? net cash inflows Year Net Cash Inflow $308,000 $205,000 $102,000 Using a hurdle rate of 12%, find the NPV of the investment. 7. What is the IRR of the capital investment described in Question 6? Print DoneExplanation / Answer
1) How much investment will be worth in 15 years
Future value = Present value × Future value Factor 14% for 15 years
= $3000 × 7.138 (Value from table provided)
= $214,140/-
Investment value in 15 years = $214,140/-
2) How much he need to invest today to get $3,000,000/- after 40 years
Present Value = Future value × Present Value factor 10% for 40 years
= $3,000,000 × .022 (Value from table provided)
= $66,000/-
Need to invest $66,000 today to receive $3,000,000/- at the end of 40 years at 10% interest rate.
3) How much money she will be able to withdraw at the end of each year for 15 years
Annual withdrawals = Value of investment ÷ Present value annuity factor 12%, 15 years
= $ 2,000,000 ÷ 6.811(Value from table provided)
= $293,642/-
She will be able to withdraw at the end of each year for 15 years amount of $293,642/- per year.
4) Investment value in 8 years
Future value of investment = investment amount × future value of annuity factor
= $3,000 × 13.233(value form table provided)
= $ 39,699/-
Investment value in 8 years will be $39,699/-
Answers are given for 1st 4 questions as per chegg policy