Assume that your required rate of return is eight percent and you are given the following...

Assume that your required rate of return is eight percent and you are given the following stream of cash flows: Year Cash Flow 1 $434 2 $696 3 $767 4 $646 5 $862 6 $397 If payments are made at the end of each period, what is the present value of the cash flow stream? Select one: a. $2,809.88 b. $2,668.92 c. $42,344.29 d. $34,434.92 e. $2,919.10

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4) Assume that your required rate of return is 12 percent and you are given the following...

4) Assume that your required rate of return is 12 percent and you are given the following stream of cash flows: Year Cash Flow 0 $10,000 1 $15,000 2 $15,000 3 $15,000 4 $15,000 5 $20,000 If payments are made at the end of each period, what is the present value of the cash flow stream? A. $66,909 B. $57,323 C. $61,815 D. $52,345 show how to calculate it by financial calculator

Assume the following: • the investor's required rate of return is 18 percent, • the expected...

Assume the following: • the investor's required rate of return is 18 percent, • the expected level of earnings at the end of this year (E1) is $9, • the retention ratio is 55 percent, • the return on equity (ROE) is 19 percent (that is, it can earn 19 percent on reinvested earnings), and • similar shares of stock sell at multiples of 5.960 times earnings per share. QUESTIONS: a. What is the expected growth rate for dividends? (?)%...

1. Suppose that your required rate of return on a duplex is 12 percent. You are...

1. Suppose that your required rate of return on a duplex is 12 percent. You are shown one such property which has an asking price of $30,000. The sales representative shows you the following cash flow projections for a holding period of 6 years: Year 1: Year 2: Year 3: Year 4: Year 5: Year 6: $4,500 $5,000 $6,000 $3,000 $8,000 $20,000 a. Should you buy the investment? b. What would be your expected rate of return? 2. What is...

(Common stock valuation) Assume the following: bullet the investor's required rate of return is 14 percent,...

(Common stock valuation) Assume the following: bullet the investor's required rate of return is 14 percent, bullet the expected level of earnings at the end of this year (Upper E 1) is $6, bullet the retention ratio is 40 percent, bullet the return on equity (ROE) is 16 percent (that is, it can earn 16 percent on reinvested earnings), and bullet similar shares of stock sell at multiples of 7.895 times earnings per share. Questions: a. Determine the expected growth...

Assume that the risk-free rate of return (Krf) is 3% and the required rate of return...

Assume that the risk-free rate of return (Krf) is 3% and the required rate of return on the market (Km) is 8%. A given stock, say, Caterpillar (CAT) has a beta coefficient of 1.03. If the dividend per share during the coming year, meaning D1, is $4.12 and g = 3.50%, what is the current intrinsic value of the stock? Exactly how much was D0? How long will it take for the dividend to double, given the growth rate, approximately?...

Assume the following: • the investor's required rate of return is 15 percent, • the expected level of earnings at the end of this year (E1) is $5

Assume the following:• the investor's required rate of return is 15 percent,• the expected level of earnings at the end of this year (E1) is $5• the retention ratio is 50 percent,• the return on equity (ROE) is 20 percent? (that is, it can earn 20 percent on reinvested earnings), and• similar shares of stock sell at multiples of 10.000 times earnings per share. Questions:a. Determine the expected growth rate for dividends.b. Determine the price earnings ratio (P/E1).c. What is...

After providing a service, you are offered the following options. If your required rate of return...

After providing a service, you are offered the following options. If your required rate of return is 12%, which of the following options will create the maximum value? Group of answer choices Receiving $9,000 after 5 years from now. Receiving $2,000 at the end of each year for next 3 years Receiving $50 at the end of each month forever. Receiving $4,800 now

Unilate’s required rate of return is 10%. Assume that you are confident about the estimates of...

Unilate’s required rate of return is 10%. Assume that you are confident about the estimates of all the variables that affect the project’s cash flows except unit sales. If product acceptance is poor, sales would be only 75,000 units a year, whereas a strong consumer response would produce sales of 125,000 units. In either case, cash costs would still amount to 60% of revenues. You believe that there is a 25% chance of poor acceptance, a 25% chance of excellent...

Assume you have the following information on Project X: Initial Investment -$1,000 Required rate of return...

Assume you have the following information on Project X: Initial Investment -$1,000 Required rate of return = 10% Year Cash Flow Present Value of CF Accum. Discount CF 0 -1000 -1000 -1000 1 200 182 182 2 400 331 513 3 700 526 1039 4 300 205 1244 What is the discount payback period?

You are considering two independent projects. The required rate of return is 13.75 percent for Project...

You are considering two independent projects. The required rate of return is 13.75 percent for Project A and 14.25 percent for Project B. Project A has an initial cost of $51,400 and cash inflows of $21,400, $24,900, and $22,200 for Years 1 to 3, respectively. Project B has an initial cost of $38,300 and cash inflows of $23,000 a year for 2 years. Which project(s), if either, should you accept? Accept both A and B Reject both A and B...

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