1 Determine the years purchase for 11% per annum in perpetuity
2 Determine the PVPMT at 11% pa for periods of 80, 60, 40, and 20 years
3 What can you conclude by comparing the answers in 2 with those in 1 ?
4 Determine the future value of $10 000 pa for 10 years at 9%pa
5 Determine the present value of cash flow in question 4 using the PVPMT formula
6 Determine the present value of the cash flow in question 4 using the PV and FVPMT formulae.
7 What is the present value of the right to receive $200 000 pa for 40 years at 15% pa?
8 Why is the sinking fund component of an investment in a depreciating asset such as a quarry so important?
9 Determine the value of the following ground lease:
Term: 20 years
Remuneration rate: 4%pa
Replacement of capital: 9.5%pa
Ground rent: $2 50 000pa
10 Prove the answer to question 9
11 How does income tax affect the rate of return on investment? How does this apply to valuations using the dual rate method?