1. Suppose that you have 50,000 and needed to invest it so that you will have $1,000,000 twenty years from now to repay a debt. What interest rate do you have to earn, assuming monthly compounding?
2. Suppose that you have 50,000 available today and can invest it at 7% per year. How long will it be before you have accumulated $500,000 in the investment?
3. Coffin Corp. wants to buy a new hearse for 60,000. It will last for 5 years. They expect to make 100 trips per year. Coffin uses a discount rate of 6 percent. If they charge 150.00 per trip, will they have a positive net present value for the investment?
4. Assume that Execution Corp. is considering investing 5,000 today in a new piece of equipment that will provide a service they can charge for. The annual cash profits from the machine will be 600, 700, 800, 900, 1000, 1100, 1200 for each of the seven years of its useful life. What is the IRR on the investment?