Question

In: Finance

The CSI Company is considering selling its School of Business to Harvard University. The proposed deal...

  1. The CSI Company is considering selling its School of Business to Harvard University. The proposed deal would require Harvard to pay CSI $30,000 and $25,000 at the end of years 1 and 2, and to also make yearly payments (at the end of the year) of $15,000 in years 3 thru 9. Harvard would make a final payment to CSI for $10,000 at the end of year 10. If the discount rate is 12% what is the present value of this series of payments?
a.

$54,585
b.

$105,250
c.

$109,160
d.

$104,520
e.

$54,735
f.

none of the above

Solutions

Expert Solution

Present value= Sum of CF*(PVIF 12%,n)

Where n= the year of receipt

Present value= $104,520

Answer is choice (d)

Calculation as below:

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

The HRI company is considering selling its School of Business to Yale. The proposed deal would...
The HRI company is considering selling its School of Business to Yale. The proposed deal would require Yale to pay HRI $30,000 and $25,000 at the end of years 1 and 2, and to also make yearly payments (at the end of the year) of $15,000 in years 3 through 9. Yale would make a final payment to HRI for $10,000 at the end of year 10. If the discount rate is 12% what is the present value of the...
Harvard University is considering the addition of a new programme - Law. Even though management is...
Harvard University is considering the addition of a new programme - Law. Even though management is content with the profitability projections of the program, the Chief Financial Officer recommends the preparation of cash budget in addition to the financial projections. Explain why the Chief Financial Officer will be insisting on the inclusion of the cash budget.
What are strategy alternatives to "Akbank Options in Digital Banking", Harvard Business School
What are strategy alternatives to "Akbank Options in Digital Banking", Harvard Business School
In a university 20% students belong to the school of business (B), 15% to the school...
In a university 20% students belong to the school of business (B), 15% to the school of engineering(E) and 30% belong to the school of social sciences(S). Of the school of business students 35% have taken a statistics course, of the school of engineering students 45% have taken a statistics course, and of the school of social sciences students, 20% have taken a statistics course. Between the three schools, what fraction of students have taken a statistics course (Q)? If...
Sovrano Café is considering a major expansion of its business. The details of the proposed expansion...
Sovrano Café is considering a major expansion of its business. The details of the proposed expansion project are summarized below: o The company will have to purchase $900,000 equipment, that require installation cost and transportation cost equal $100,000. o The sources of fund will be 250,000 loan from bank at interest 8% and the remaining will be from equity. o The company will pay interest equal to $120,000 each year. o The project has an economic life of 4 years....
The term “Marketing Myopia” was coined by the late Harvard Business School marketing professor, Theodore Levitt,...
The term “Marketing Myopia” was coined by the late Harvard Business School marketing professor, Theodore Levitt, in a 1960 HBR article (republished in 2004). The “heart of the article,” according to Deighton, a distinguished Harvard Professor, is Levitt’s argument that companies are too focused on producing goods or services and don’t spend enough time understanding what customers want or need. Therefore, he “encouraged executives to switch from a production orientation to a consumer orientation.” As Levitt used to tell his...
From Harvard Business School HBX CORe 2020 Economics for Managers Share a story or a link...
From Harvard Business School HBX CORe 2020 Economics for Managers Share a story or a link to a news article describing a government intervention in a market. Explain how the intervention changes the outcome of the market, and whether you think the intervention had a positive or negative effect.
A professor in the school of business at a certain university wants to investigate the claim...
A professor in the school of business at a certain university wants to investigate the claim that the prices of new textbooks in the campus store are higher than a competing national online bookstore by more than 50 cents. The professor randomly chooses required texts for 12 business school courses. Use α=0.05α=0.05. The data is given in the table below. Book Campus Store Online Store A 108.51 109.42 B 200.06 201.93 C 223.52 226.39 D 186.12 183.9 E 121.65 122.13...
A professor in the school of business at a certain university wants to investigate the claim...
A professor in the school of business at a certain university wants to investigate the claim that the prices of new textbooks in the campus store are higher than a competing national online bookstore. The professor randomly chooses required texts for 12 business school courses. The data is given in the table below. Book Number Campus Store Online Store Book 1 125.45 124.27 Book 2 88.37 86.21 Book 3 230.98 229.6 Book 4 151.8 153.02 Book 5 236.44 237.4 Book...
A professor in the school of business at a certain university wants to investigate the claim...
A professor in the school of business at a certain university wants to investigate the claim that the prices of new textbooks in the campus store are higher than a competing national online bookstore by more than 50 cents. The professor randomly chooses required texts for 12 business school courses. Use α=0.05 . The data is given in the table below. Book Campus Store Online Store A 171.79 171.56 B 155.76 154.72 C 108.11 106.57 D 161.67 156.68 E 151.47...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT