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Posted Aug 26 2019

Answered on Aug 27 2019

A./ VALUE OF INVESTMENT 20 YEARS = PRESENT VALUE OF ANNUITY * FVIFA 4%, 20YEARS FVIFA= FUTURE VALUE INTERESTFACTOR ANNUITY VALUE OF INVESTMENT 20 YEARS= $7500 * 29.778 = $223335 VALUE OF INVESTMENT 25 YEARS = PRESENT VALUE OF ANNUITY * FVIFA 4%, 25YEARS FVIFA= FUTURE VALUE INTERESTFACTOR ANNUITY VALUE OF INVESTMENT 25 YEARS= $7500 * 41.646 = $312345 VALUE OF INVESTMENT 30 YEARS = PRESENT VALUE OF ANNUITY * FVIFA 4%, 30YEARS FVIFA= FUTURE VALUE INTERESTFACTOR ANNUITY VALUE OF INVESTMENT 30 YEARS= $7500 * 56.805 = $426038 B./ VALUE OF INVESTMENT 20 YEARS = PRESENT VALUE OF ANNUITY * FVIFA 5%, 20YEARS FVIFA= FUTURE VALUE INTERESTFACTOR ANNUITY VALUE OF INVESTMENT 20 YEARS= $7500 * 33.066 = $247995 VALUE OF INVESTMENT 25 YEARS = PRESENT VALUE OF ANNUITY * FVIFA 5%, 25YEARS FVIFA= FUTURE VALUE INTERESTFACTOR ANNUITY VALUE OF INVESTMENT 25 YEARS= $7500 * 47.727 = $357953 VALUE OF INVESTMENT 30 YEARS = PRESENT VALUE OF ANNUITY * FVIFA 5%, 30YEARS FVIFA= FUTURE VALUE INTERESTFACTOR ANNUITY VALUE OF INVESTMENT 30 YEARS= $7500 * 66.439 = $498293 C./ BASED ON THE ABOVE CALCULATIONS MADE WE CAN EASILY FOUND THAT THE INTEREST EARNNING RATE IS GOING ON INCEREASING WITH THE DURATION OF INVESTMENT. THERE IS A DIRECT RELASIONSHIP BETWEEN THE INTEREST RATE EARNNED AND DURATION OF INVESTMENT.

Caterpillar, Inc | CNH Global | ||||

2014 | 2013 | 2012 | 2013 | ||

ROE | 18.94% | 20.51% | 35.87% | 20.68% |

I have performed DuPont analysis on Caterpillar Inc. and its closest competitor, CNH Global. Your analysis should include a discussion of the strengths or weaknesses revealed in each ratio. Please analyze the ROE. (please do not copy any info from google or investopia).

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21 Jul 2019

A stock is expected to pay dividends of $1.00, $0.75 and $2.00 for the next 3 years, respectively. After that time, dividends are expected to grow at a constant rate of 6% indefinitely. The required return on the stock is 10% during the non-constant growth period and 8% afterwards. Compute the fair market value of the stock today.

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What is the future value (FV) of $60,000 in eight years, assuming the interest rate is 6% per year? A.$39,000 B.$171,260 C.$154,134 D.$145,571

Answered

13 Jan 2019