that will pay you $27,000 per TUTORIAL 04 TIME VALUE OF year for the first ten years, MONEY $35,000 per year for the next 1. You are valuing an investment ten years, and $48,000 per that will pay you $27,000 per year the following ten years (all year for the first ten years, payments are at the end of $35,000 per year for the next each year). If the appropriate ten years, and $48,000 per annual discount rate is 9.00%, year the following ten years (all what is the value of the payments are at the end of investment to you today? each year). If the appropriate 2. You are planning for retirement annual discount rate is 9.00%, 34 years from now. You plan to what is the value of the invest $4,200 per year for the investment to you today? first 7 years, $6,900 per year 2. You are planning for retirement for the next 11 years, and 34 years from now. You plan to $14,500 per year for the invest $4,200 per year for the following 16 years (assume all first 7 years, $6,900 per year cash flows occur at the end of for the next 11 years, and each year). If you believe you $14,500 per year for the will earn an effective annual following 16 years (assume all rate of return of 9.7%, what will cash flows occur at the end of your retirement investment be each year). If you believe you worth 34 years from now? will earn an effective annual 3. Exactly ten years from now Sri rate of return of 9.7%, what will chand will start receiving a your retirement investment be pension of Rs 3000 a year. The worth 34 years from now? payment will continue for 3. Exactly ten years from now Sri sixteen years. How much is the chand will start receiving a pension worth now, if Sri pension of Rs 3000 a year. The chands interest rate is 10%. payment will continue for 4. How the earnings of the sixteen years. How much is the existing shareholders diluted if pension worth now, if Sri the profits do not increase chands interest rate is 10%. immediately in proportion to 4. How the earnings of the the increase in number of existing shareholders diluted if ordinary shares? the profits do not increase 5. If preference shares do have a immediately in proportion to fixed divided, than how it is the increase in number of different from bonds? ordinary shares? 6. If the shareholders are the 5. If preference shares do have a owners of the organization, fixed divided, than how it is than why do they have residual different from bonds? claim on income and assets. 6. If the shareholders are the owners of the organization, than why do they have residual claim on income and assets.