HCA 420 HCA420 Workshop Three 3.5 Dropbox Chapters 9&10 Problems Solution

HCA 420 Workshop Three 3.5 Problems from Chapters 9 and 10 Dropbox (Indiana)

9.4 Find the following values assuming a regular, or ordinary, annuity:

9.7 Consider another uneven cash flow stream:

    Year                                                              Cash Flow

      0                                                                    $2,000 

1 2,000

2 0

3 1,500

        4                                                                      2,500

        5                                                                      4,000

9.9 Assume that you just won $35 million in the Florida lottery, and hence the state will pay

you  20  annual payments of $1.75 million each beginning immediately. If the rate of return on securities of similar risk to the lottery earnings (e.g., the rate on 20-year U.S. Treasury bonds) is

6 percent, what is the present value of your winnings?

10.1 Consider the following probability distribution of returns estimated for a proposed project that involves a new ultrasound machine:

10.5 Several years ago, the Value Line Investment Survey reported the following market betas for the stocks of selected healthcare providers: