1. Calculate the (present) value of an investment in a private business that has cash flow...

1. Calculate the (present) value of an investment in a private business that has cash flow of $50,000 per year, and is expected to earn at least this same amount per year for the “foreseeable future.” Assume your required rate of return, or discount rate is 30.0%.

2. Calculate the value of a BBB rated corporate bond that has a coupon rate of 5.0%, and 10 years to maturity. Current market interest rates for this grade of bond are approximately 4.0%. Is this a Premium, or a Discount bond?

Expert Solution

jeff jeffy answered 2 years ago

Calculate the present value of the following amounts assuming that the cash flow is received at...

Calculate the present value of the following amounts assuming that the cash flow is received at the end of each specified period: 211 Situation Cash Flow Discount rate End of period( pear year) Frequency A $15,000 10% 8 Bimonthly B $20,000 13% 12 Semiannual C $6,000 9% 10 Quarterly D $50,000 7% 50 Annual E $8,500 7% 15 Quarterly I appreciate if you can explain me step by step. Thank you.

5. Present value To find the present value of a cash flow expected to be paid...

5. Present value To find the present value of a cash flow expected to be paid or received in the future, you will the future value cash flow by (1 + I)NN. What is the value today of a $12,000 cash flow expected to be received eight years from now based on an annual interest rate of 6%? $9,411 $6,023 $11,670 $7,529 Your broker called earlier today and offered you the opportunity to invest in a security. As a friend,...

Problem 4-7 Present and Future Value of an Uneven Cash Flow Stream An investment will pay...

Problem 4-7 Present and Future Value of an Uneven Cash Flow Stream An investment will pay $200 at the end of each of the next 3 years, $400 at the end of Year 4, $600 at the end of Year 5, and $800 at the end of Year 6. If other investments of equal risk earn 8% annually, what is its present value? Round your answer to the nearest cent.What is its future value? Round your answer to the nearest...

1. Find the present value of the following cash flow stream with an interest rate of...

1. Find the present value of the following cash flow stream with an interest rate of 7%: Year 1 = $2,000 Year 2 = $4,000 Year 3 = $1,000 Year 4 = $6,000 2. Find the present value of the following ordinary annuity: $800 per year for 10 years at 6% 3. If you invest $5,000 in an investment which has an annual return of 10% but compounds every 6 months (instead of yearly), how much will it have after...

What is the present value and future value of the following cash flow stream at a...

What is the present value and future value of the following cash flow stream at a rate of 8.00%? Years: 0 1 2 3 4 CFs: $0 $75 $225 $0 $500

What is the Net Present Value of the following cash flow stream? Year Cash Flow 0...

What is the Net Present Value of the following cash flow stream? Year Cash Flow 0 -$489 1 $363 2 $192 3 $161 4 $256 Assume an interest rate of 13% Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. If your answer is negative, enter your answer as a negative number rounded off to two decimal points.

Different cash flow. Given the following cash inflow, what is the present value of this cash...

Different cash flow. Given the following cash inflow, what is the present value of this cash flow at 8 %, 12 %, and 26% discount rates? Year 1: $3,000 Year 2: $5,000 Years 3 through 7: $0 Year 8: $24,000 What is the present value of this cash flow at 8%, 12%, 26% discount rate?

Discounted Cash Flow Models discussed: The Adjusted Present Value Model The Free Cash Flow to Equity...

Discounted Cash Flow Models discussed: The Adjusted Present Value Model The Free Cash Flow to Equity Model What are the advantages and shortcomings of each? Which one do you think is generally better to use? Why?

1. Find the present value as of year 0 of the following cash-flow stream if investments...

1. Find the present value as of year 0 of the following cash-flow stream if investments of similar risk are yielding 8% Year Cash Flow 0 through 14 $8,000 per year in each of those years 2. Find the present value as of year 0 of the following cashflow stream if investments of similar risk are yielding 8.25% Year Cash Flow 6 through 28 $8,000 per year in each of those years

PRESENT AND FUTURE VALUES OF A CASH FLOW STREAM An investment will pay $50 at the...

PRESENT AND FUTURE VALUES OF A CASH FLOW STREAM An investment will pay $50 at the end of each of the next 3 years, $200 at the end of Year 4, $300 at the end of Year 5, and $550 at the end of Year 6. If other investments of equal risk earn 11% annually, what is its present value? Round your answer to the nearest cent. $ If other investments of equal risk earn 11% annually, what is its...

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