ST Trucking just signed a $3.8 million contract. The contract calls for a payment of $1.1 million today, $1.3 million one year from today, and $1.4 million two years from today. What is this contract worth today at a discount rate of 8.7 percent? O a. $3,202,223.89 b. $2,108,001.32 c. $3,202,840.91 d. $3,783,648.48 e. $3,480,817.37
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- Don Draper has signed a contract that will pay him $50,000 at the end of each year for the next 8 years, plus an additional $150,000 at the end of year 8. If 7 percent is the appropriate discount rate, what is the present value of this contract? Question content area bottom Part 1 The present value of the contract is $ enter your response here . (Round to the nearest cent.)1. A contract calls for a lump-sum payment of $15,000. Find the present value of the contract assuming. When making these calculations, you need to use a present value factor that is carried to three decimal places to get the correct answers. a. The payment is due in five years, and the current interest rate is 9 percent. Your answer should contain a dollar sign.b. The payment is due in ten years and the current interest rate is 5 percent. Your answer should contain a dollar sign.c. Between the two calculations, A and B, which option is the best option for the person receiving the payment? State in a full sentence why you chose this option.You are offered a $3,000,000 contract to be paid to you over 6 years at $500,000 per year. The first payment will be made at the end of the year. If the current market interest rate is 3.5%, what is the contract really worth to you? $2,500,000.00 $3,275,076.09 $2,664,276.51 $3,000,000.00
- Assessment Question 20, P6-58 (similar to) The present value of the contract is $ (Round to the nearest cent.) (Present value of a complex stream) Don Draper has signed a contract that will pay him $60,000 at the end of each year for the next 7 years, plus an additional $140,000 at the end of year 7. If 7 percent is the appropriate discount rate, what is the present value of this contract? > C3. Consider the buyer of a FRA 6-9. The contract rate is 6.35% on a notional amount of $10 million. Calculate the settlement amount of the seller if the settlement rate is 6.85%. Assume a 30/360 day count basis.4. A contract requires payments of $3762.00 today, $2666.00 in 2 years, and $5932.00 in 5 years. When can the contract be fulfilled by a single payment equal to the sum of the required payments if money is worth 7% p.a. compounded quarterly? State your answer in years and months (from 0 to 11 months). The contract can be fulfilled in year(s) and month(s).
- if the discount rate was 7% isntead of 10% how might that change your answer in terms of which contract has the highest present value. you do not need to do both calculations, merely indicate what the likely impact would be. Contract 1 $900,000 signing bonus $850,000 at the end of each year for the next 5 years Contract 2 $200,000 immediate signing bonus $100,000 at the end of each year for the next five years $150,000 a year at the end of years 5 through 10 $1,000,000 a year at the end of years 11 through 40 Contract 3 $1,000,000 immediate signing bonus $500,000 at the end of year 1 $1,000,000 at the end of year 2 $1,500,000 at the end of year 3 $2,500,000 at the end of year 4 As part of the third offer hhe was also promised a $200,000 bonus for any year in which he was selected to play in the Pro Bowl All Star game. his agent figured there was a 25% probability of that occuring in each of the next 4 years. The Edmonton, Alberta, team of the canadian football team offered…A contract requires payments of $4610.00 today, $5440.00 in 2 years, and $4438.00 in 5 years. When can the contract be fulfilled by a single payment equal to the sum of the required payments if money is worth 7% p.a. compounded semi-annually? State your answer in years and months (from 0 to 11 months). The contract can be fulfilled in year(s) and 40001 month(s).Reference rate is 6-month Treasury bill (182 days to maturity). The FRA settles in 270 days. The contract rate is 0.12%. The notional amount is $100 million. At settlement, the yield on 6-month Treasury bills is .15%. What is the amount of compensation that must be paid under the agreement at settlement? (You have to use enough precision to get the cents right in the answer.) Use a 360 day year in your calculations.
- A contract requires payments of $4954.00 today, $4004.00 in 3 years, and S 2583.00 in 5 years. When can the contract be fulfilled by a single payment equal to the sum of the required payments if money is worth 7% p.a. compounded semi - annually? State your answer in years and months (from 0 to 11 months).Find the present value of a contract that requires yearly payments of 11,832 for 20 years. Money is worth 3.37% for the first eight years and 8.02% for the last 12 years. Solve and explain...Suppose you take a 3/1 interest - only, 30-year ARM for $140,000.00 with an interest - only contract rate of 5% and a following rate of 7% in year 4. Assume you pay 1 discount points. Suppose that the contract rate in year 5 is 7.25% and this contract rate stays constant from years 5 through 30. What is the APR?