Fin 336 Intermediate Corporate Finance Homework Lessons 1-8 | Solved already latest 2025/26 - Wilmington University.

Fin 336 Intermediate Corporate Finance
Homework Lesson 1

1. Please watch the following video:
Perpetuities (1:54)
Now use the video and the class lecture to answer the following question:
If a company promises to pay you, and your descendants, $400 per year forever, and your
required rate of return is 10 percent, what is the most you would pay for this perpetuity?

PV = C/r
PV= 400/0.1
PV= 4000

2. Please watch the following video:
Present Value, Future Value (3:01)
Now use the video and the class lecture to answer the following questions:
a. If you deposit $12,000 in the bank today, what will it be worth in 15 years at 9 percent
compound growth? What is the formula for this problem?

FV=PV(1+I)**n
FV=12000(1+0.09)**15
FV=12000(1.09)**15
FV=43710$

b. If you plan to receive $12,000 from the bank in 15 years, what is it worth today at 9
percent compound growth? What is the formula for this problem?

PV= FV/(1+i)**n
PV= 12000/(1+0.09)**15
PV=12000/(1.09)**15
PV=3294

3. Please watch the following videos:
Annuities (3:25) and TVM using BAIIPlus Part 1 (8:54)
Now use the videos and the class lecture to answer the following questions:
a. Seahawk Enterprises has an estimated pension liability of $1.5 million due in 15 years.
The company can earn 8 percent per year on its pension savings. How much must the
company pay into the pension fund each year to be able to pay the $1.5 million liability
when it comes due, if it makes the first payment in one year (ordinary annuity)?

N=15
I/Y=8
FV= 1500000
PV=0
CPT PMT
PMT=55244$



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, b. Seahawk Enterprises has an estimated pension liability of $1.5 million due in 15 years.
The company can earn 8 percent per year on its pension savings. How much must the
company pay into the pension fund each year to be able to pay the $1.5 million liability
when it comes due, if it makes the first payment today (annuity due)?

2nd BGN and 2nd SET

N=15
I/Y=8
FV=1500000
PV=0

CPT PMT
PMT =51152$

c. If you deposit $1,000 per month at 0.75 percent per month (first deposit occurring today),
what will it be worth in 15 years?

2nd BGN and 2nd SET

N=15*12=180
I/Y=0.75
PMT=-1000
PV=0

CPT FV
FV=381243$

4. Please watch these videos:
BA II Plus FV of mixed cash flows (5:38) and TVM using BA II Plus Part 2 (7:45)
Now use the videos and the class lecture to answer the following questions:
Given the following cash flows and a compound growth rate of 9 percent:
Year: 0 1 2 3 4 5 6
Cash Flow ($): 60 60 75 75 75 90
a. What is the present value (at time 0) of this stream of uneven cash flows?

CF
CF0=0 (enter/down)
CO1=60(enter/down)
FO1=2(enter/down)
CO2=75(enter/down)
F02=3(enter/down)
CO3=90(enter/down)
FO3=1(enter/down)




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, NPV. I=9
NPV=319

b. What is the future value (at time 6) of this stream of uneven cash flows?

CF
CF0=0 (enter/down)
CO1=60(enter/down)
FO1=2(enter/down)
CO2=75(enter/down)
F02=3(enter/down)
CO3=90(enter/down)
FO3=1(enter/down)

NFV. I=9
NFV=535


5. Use the same cash flows given in question 4 to answer the following questions:
a. What amount per year could you substitute as an ordinary annuity that would be equal to
this stream of uneven cash flows (with payments made over 6 years from time 1 to time 6)?

CF
CF0=0 (enter/down)
CO1=60(enter/down)
FO1=2(enter/down)
CO2=75(enter/down)
F02=3(enter/down)
CO3=90(enter/down)
FO3=1(enter/down)

NPV I=9
CPT NPV=319

After
N=6
I/Y=9
PV=319
FV=0
CPT PMT=71

b. What amount per year could you substitute as an annuity due that would be equal to this
stream of uneven cash flows (with payments made over 6 years from time 0 to time 5)?

CF
CF0=0 (enter/down)



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