Question

In: Finance

Present value.  Two rival football fans have made the following​ wager: if one​ fan's college football...

Present value.  Two rival football fans have made the following​ wager: if one​ fan's college football team wins the conference title​ outright, the other fan will donate ​$2000 to the winning school. Both schools have had relatively unsuccessful​ teams, but are improving each season. If the two fans must put up their potential donation today and the discount rate is 7.5​% for the​ funds, what is the required upfront deposit if we expect a team to win the conference title in 5 ​years?  10 ​years?  15 ​years? What is the required upfront deposit if we expect a team to win the conference title in 5 ​years? ​(Round to the nearest​ cent.)

Solutions

Expert Solution

​​​​

jeff jeffy answered 1 month ago
Next > < Previous

Related Solutions

You are a college student, and you have a friend at a rival university. The two...
You are a college student, and you have a friend at a rival university. The two of you compete in almost everything! One day, your friend boasted that students at her university are taller than the students at yours. You each gather a random sample of heights of people from your respective campuses. Your data are displayed below (units are inches). Your friend's data: (checksum: 1213.5) 75.5 72 76.4 69.7 76 74.7 80.5 71.5 73.2 67.3 66.8 65.2 66.7 72.5...
Nationwide, football fans since 2010 on average have been satisfied with their team's draft performance 45%...
Nationwide, football fans since 2010 on average have been satisfied with their team's draft performance 45% of the time. Matt LaFleur wants to know if Packers fans really are less satisfied than the league average. Using the 540 Packers fans sampled in the previous question, LaFleur tests the hypothesis H0 : p = 0.45,   Ha : p < 0.45. The P-value is:
Present value For the case shown in the following​ table, calculate the present value of the...
Present value For the case shown in the following​ table, calculate the present value of the cash​ flow, discounting at the rate given,and assuming that the cash flow is received at the end of the period noted. ​(Click on the icon here in order to copy the contents of the data table below into a​ spreadsheet.) Single cash flow- $148,000 discount rate- 13% end of period (years) - 7
Net present value (NPV)The net present value (NPV) rule is considered one of the most...
Net present value (NPV)The net present value (NPV) rule is considered one of the most common and preferred criteria that generally lead to good investment decisions.Consider this case:Suppose Pheasant Pharmaceuticals is evaluating a proposed capital budgeting project (project Beta) that will require an initial investment of $2,225,000. The project is expected to generate the following net cash flows:YearCash FlowYear 1$275,000Year 2$475,000Year 3$450,000Year 4$450,000Pheasant Pharmaceuticals’s weighted average cost of capital is 8%, and project Beta has the same risk as the...
Which one of the following will increase the present value of a lump sum future amount?...
Which one of the following will increase the present value of a lump sum future amount? Assume the interest rate is a positive value and all interest is reinvested. A. Increase time period B. None of these C.Increase in interest rate D. Decrease in time period Double checking, I believe answer is C.?
Provide two examples of the use of present value techniques in accounting. Please have at least...
Provide two examples of the use of present value techniques in accounting. Please have at least 350 words and provide a reference please.
Two annuities with the same effective annual interest rates have the same present value: • a)...
Two annuities with the same effective annual interest rates have the same present value: • a) a 10 year annuity-immediate with annual payments of $55 • b) a 20 year annuity immediate with annual payments of $20 for the first 10 years, and then $77 for the next 10 years. Find this common present value.
The following present value factors are provided for use in this problem. Periods Present Value of...
The following present value factors are provided for use in this problem. Periods Present Value of $1 at 10% Present Value of an Annuity of $1 at 10% 1 0.9091 0.9091 2 0.8264 1.7355 3 0.7513 2.4869 4 0.6830 3.1699 Cliff Co. wants to purchase a machine for $64,000, but needs to earn an 10% return. The expected year-end net cash flows are $25,000 in each of the first three years, and $29,000 in the fourth year. What is the...
The following present value factors are provided for use in this problem. Periods Present value of...
The following present value factors are provided for use in this problem. Periods Present value of $1 at 8% Present value of an Annuity of $1 at 8% 1 0.9259 0.9259 2 0.8573 1.7833 3 0.7938 2.5771 4 0.7350 3.3121 Xavier Co. wants to purchase a machine for $37,700 with a four-year life and a $1,100 salvage value. Xavier requires an 8% return on investment. The expected year-end net cash flows are $12,700 in each of the four years. What...
Determine the future value and the present value of the following single amounts: Future and Present...
Determine the future value and the present value of the following single amounts: Future and Present Values item Invested Amount Interest Rate Percentage No. of Periods 1 15,000.00 6 12 2 20,000.00 8 10 3 30,000.00 12 20 4 50,000.00 4 12
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT