Oange valley packaging just bought a new ropes course


Orange Valley Packaging just bought a new ropes course. To pay for the ropes course, the company took out a loan that requires Orange Valley Packaging to pay the bank a special payment of 6,550 dollars in 4 month(s) and also pay the bank regular payments. The first regular payment is expected to be 4,790 dollars in 1 month and all subsequent regular payments are expected to increase by 0.61 percent per month forever. The interest rate on the loan is 1.81 percent per month. What was the price of the ropes course? You own a store that is expected to make annual cash flows forever. The cost of capital for the store is 14.43 percent. The next annual cash flow is expected in one year from today and all subsequent cash flows are expected to grow annually by 3.99 percent. What is the value of the store if you know that the cash flow in 3 years from today is expected to be 12,400? Jabari has an investment worth 354,361 dollars. The investment will make a special payment of X to Jabari in 7 quarters in addition to making regular quarterly payments to Jabari forever. The first regular quarterly payment to Jabari is expected to be 4,220 dollars and will be made in 3 months. All subsequent regular quarterly payments are expected to increase by 0.47 percent per quarter forever. The expected return for the investment is 1.71 percent per quarter. What is X, the amount of the special payment that will be made to Jabari in 7 quarters? Grace owns two investments, A and B, that have a combined total value of 161,434 dollars. Investment A is expected to pay 7,009 dollars per year forever; its next payment is expected in 1 year; and its expected return is 5.41 percent per year. Investment B is also expected to make annual payments forever and make its next payment in 1 year. Investment B’s next payment is expected to be 3,532 and all subsequent payments are expected to grow by 1.1 percent per year forever. What is the annual 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.

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Financial Management: Oange valley packaging just bought a new ropes course
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