CBS agreed to pay $1,000M per year for nine years to retain the rights to the...

CBS agreed to pay $1,000M per year for nine years to retain the rights to the football games. The first payment will be made at the end of this year. If CBS has an opportunity interest rate of 12%, what is the value today of the total payments that CBS will make?

Expert Solution

Given that,

CBS will pay PMT = $1000M per year for next t = 9 years at the end of each year.

interest rate r = 12%

So, value of this investment today can be calculated using PV formula of annuity

PV = PMT*(1 - (1+r)^-t)/r = 1000*(1 - 1.12^-9)/0.12 = $5328.25M

So, the value today of the total payments that CBS will make is $5328.25M

jeff jeffy answered 2 years ago

Investment X offers to pay you $5,100 per year for nine years,whereas Investment Y offers...

Investment X offers to pay you $5,100 per year for nine years, whereas Investment Y offers to pay you $7,200 per year for five years. Calculate the present value for Investments X and Y if the discount rate is 6 percent. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Present value Investment X $ Investment Y $ Calculate the present value for Investments X and Y if the discount rate is 16 percent. (Do not round...

Investment X offers to pay you $4,300 per year for nine years, whereas Investment Y offers...

Investment X offers to pay you $4,300 per year for nine years, whereas Investment Y offers to pay you $6,000 per year for six years. (Use a Financial calculator to arrive at the answers. Round "PV Factor" to 3 decimal places. Round the final answers to 2 decimal places.) Calculate the present value for Investment X and Y if the discount rate is 4%. Present value Investment X $ Investment Y $ Calculate the present value for Investment X and...

Investment X offers to pay you $5,000 per year for nine years, whereas Investment Y offers...

Investment X offers to pay you $5,000 per year for nine years, whereas Investment Y offers to pay you $7,500 per year for five years. a. Calculate the present value for Investments X and Y if the discount rate is 5 percent. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. Calculate the present value for Investments X and Y if the discount rate is 15 percent. (Do not round intermediate calculations and...

Investment X offers to pay you £6,000 per year for nine years, whereas Investment Y offers...

Investment X offers to pay you £6,000 per year for nine years, whereas Investment Y offers to pay you £8,000 per year for six years. (Do not round intermediate steps. Round your answers to 2 decimal places (e.g., 32.16). The program includes a margin of error of +/- 1%.) Requirement 1: Which of these cash flow streams has the higher present value if the discount rate is 5 per cent? Investment Y has the higher present value of £...

Investment X offers to pay you $6,100 per year for nine years, whereas Investment Y offers...

Investment X offers to pay you $6,100 per year for nine years, whereas Investment Y offers to pay you $8,800 per year for five years. a. Calculate the present value for Investments X and Y if the discount rate is 5 percent. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. Calculate the present value for Investments X and Y if the discount rate is 15 percent. (Do not round intermediate calculations...

You invest in a project that will pay you $500 per year for 5 years and then pays $750 per year for the following 10 years

You invest in a project that will pay you $500 per year for 5 years and then pays $750 per year for the following 10 years (assume that all payments are made at the end of the year). You require a 6% rate of return on this type of investment. Give your return requirement, what is the maximum amount that you would be willing to pay today for the cash flow stram associated with this project? Round only your final...

you inherited an annuity that will pay you $900 per year for 18 years, with the...

you inherited an annuity that will pay you $900 per year for 18 years, with the first payment being made today. would you sell it today if you were offered a price of $11,000 for it? assume interesr rate is 5%

Under the terms of an interest swap, a bank has agreed to pay 10% per annum...

Under the terms of an interest swap, a bank has agreed to pay 10% per annum and receive three-month LIBOR in return on a notional principal of $100 million with payments being exchanged every three months. The swap has a remaining life of 11 months. The average of the bid and offer fixed rates currently being swapped for three-month LIBOR is 12% per annum for all maturities. The three-month LIBOR rate one month ago was 11.8% per annum. All rates...

Trena has agreed to pay Jayme the following payments: 30,000 at the end of 2 years;...

Trena has agreed to pay Jayme the following payments: 30,000 at the end of 2 years; 50,000 at the end of 5 years; and 10,000 at the end of 8 years. You are given that v=0.9. Calculate the Modified duration of Trena's liability.

a) You took out a one-year loan for $3000 and agreed to pay it in three...

a) You took out a one-year loan for $3000 and agreed to pay it in three equal installments, one payment at the end of 1 months, a second payment at the end of 2 months, and a last payment at the end of the year. What is the size of each payment? Assume interest rate is 9%. b) In part (a), suppose that you made three non-equal payments: the first was $600 at the end of 1 month, the second...

Question