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finance exercise and need an explanation and answer to help me learn.
The questions are attached in pdf, need a typed solution.
Requirements:
GEORGE MASON UNIVERSITY CEIE 301 Engineering and Economic models in Civil Engineering Spring 2023 HOMEWORK # 1 Due on 02/02/2023 Textbook, Chapter 1 Problems (Total: 30 Points) Problem 1.16 (2.5 points) If you expect to receive an inheritance of $100,000 one year from now, how much money would you be able to borrow now at an interest rate of 8% per year if you pledge the total amount of the inheritance against the loan? Problem 1.19 (2.5 points) A start-up chemical company has an average cost of capital of 15% per year. Additionally, it has a long-term goal of making at least a 20% per year rate of return on all investments; however, because of market opportunity the ROR can be reduced for the current project by 3%. If the company acquired $50 million in venture capital, how much did it have to earn in the first year? Problem 1.34 (5 points) Dawn is preparing a home office to perform subcontract projects for midsized architect firms. She plans to use $15,000 of her own funds which currently generate a return of 4% per year. The remainder of financing will be provided by a $10,000 bank loan carrying a 9% per year interest rate. She hopes to realize a return of 3% above the average cost of capital to establish her office, and she realizes that the factors of inflation and risk should also be considered. Her decision is to add another 2% per year to compensate for these elements. What is the MARR she should use when evaluating projects? Problem 1.37 (5 points) Will and Ben Ice Cream plan to build a new mixing plant to serve customers in Mexico. Because the company is in good financial shape with equity funds returning 11% per year, the bank will charge an interest rate of 8% per year for the loan. An MARR that is 5% over the WACC is required to proceed with the project, which sets the MARR at 14%. What percentage of debt financing can the company assume to meet its MARR requirement? Problem 1.45 (5 points) In order to finance a new product line, a company that makes high-temperature ball bearings borrowed $1.8 million at 10% per year compound interest. If the company
repaid the loan in a lump sum amount after 2 years, what was (a) the amount of the payment, and (b) the amount and percentage of interest based on the original principal? Problem 1.56 (10 points) Continental Airlines operates in and out of many countries. Country A has a low inflation rate of 3% per year while country B has a high rate of 30% per year. A $1 million fund is maintained in each country for emergency purchases to repair disabled aircraft. (a) Use a formula to determine the purchasing power after 2, 4, and 5 years if the funds are not utilized. (b) (Spreadsheet exercise) Use a spreadsheet to plot the diminishing purchasing power curves, if assigned by your instructor. (c) With the dramatic effect of 30% inflation, if you were president of Continental Airlines, how would you manage this situation?

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