Financial Planning and Forecasting

Given the following history, use a three-quarter moving average to forecast the demand
for the third quarter of this year. Note that the 1st quarter is Jan, Feb, and Mar; 2nd
quarter Apr, May, Jun; 3rd quarter Jul, Aug, Sep; and 4th quarter Oct, Nov,

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Last year 120 140 145 195 205 220 165 155 145 220 245 265
This year 140 145 200 210 240 255

A record company bought the rights to an artist’s music catalogue and they expect to receive royalty payments of $62,000 per year forever (a perpetuity) What is this cash flow worth? Assume interest rates are 61%

XYZ Company expects to receive a cash flow of $1 million in 3 years

If the competitive market interest rate is fixed at 3% per year, how much can they borrow today in order to be able to repay the loan in its entirety with that cash flow?

Solution:

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