Use the information below to answer the following questions.
i. Assume the firm can produce a liter of orange juice in the U.S. and ship it to Spain for $2.75. If the firm wants a 60% markup on the product, what should the juice sell for in Spain?
ii. Now the firm begins producing the orange juice in Spain. The product costs 3.50 euros to produce and ship to Zambia, where it can be sold for 20 Kwacha. What is the dollar profit on the sale?
b) What is the present value of K800 to be received at the end of 8 years, assuming an interest rate of 20 percent, compounded quarterly?
c) What annual interest rate would you need in order to have an ordinary annuity of K7,500 per year accumulate to K279,600 in 15 years?
d) MoneyFlows Bank Plc. provides you with a loan valued at K10, 000 and you agree to repay the balance in 10 equal instalments, paid at the end of each period. The loan costs you 6% interest compounded semi-annually.
Required: (Round the answers to 2 decimal places)
i. Calculate the effective annual rate.
ii. Find the repayment to be made at the end of each period.
iii. Draw an amortization schedule for the first 3 periods.