FIN 419 Expect Success/uophelp.com FIN 419 Expect Success/uophelp.com | Page 3

For more course tutorials visit
www.uophelp.com

1) Risk and probability Micro-pub, Inc., is considering the purchase
of one of two microfilm cameras, R and S. Both should provide
benefits over a10-year period, and each requires an initial investment
of $4,000. Management has constructed the following table of
elements of rates of return and possibilities for pessimistic, most
likely, and optimistic results.

2) Capital asset princing model (CAPM) Use the capital asset
princing model to find the required reurn.

3)a. What single investmentmade today, annual interest, will be worth
$3,500 at the end of 10 years?
b. What is the present value is $3,500 to be received at the end of 10
years if the discount rate is 6%?
c. What is the most you would pay today for a promise to repay you
$3,500 at the end of 10 years if your opportunity cost is 6% ?
d. Compare, contrast, and discuss your findings in part a through c.

4) Loan Payment Determine the equal, annual, end-of-year payment
required each year over the life of the loan to repay it fully during the
stated term of the loan.
5) Loan amortization schedule Personal Finace Problem Joan
Messineo borrowed $18,000 at a 14% annual rate of interest to be
repaid over 3 years. The loan is amortized into three equal, annual,
end-of-year payments.