You are presented with an investment opportunity that will give you the following stream of cash...

You are presented with an investment opportunity that will give you the following stream of cash flows: nothing for the next 2 years; at the following year, an amount of $5,000 per year until year 14; and then an amount of $8,000 per year until year 22. If your required rate of return (APR) is 9% compounded annually, what is the present value today of these cash flows?

Solutions

Expert Solution

We know that,

Present Value = Amount / (1+ rate)^ years

Please let me know in case you have any queries and I will be happy to assist you.

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

You are presented with an investment opportunity that will give you the following stream of cash...

You are presented with an investment opportunity that will give you the following stream of cash flows: nothing for the next 5 years; at the following year, an amount of $3,000 per year until year 10; and then an amount of $8,000 per year until year 25. If your required rate of return (APR) is 12% compounded annually, what is the present value today of these cash flows?

You are presented with an investment opportunity that will give you the following stream of cash flows:

You are presented with an investment opportunity that will give you the following stream of cash flows: nothing for the next 5 years; at the following year, an amount of $2,000 per year until year 13; and then an amount of $10,000 per year until year 23. If your required rate of return (APR) is 8% compounded annually, what is the present value today of these cash flows?Do not use the $ sign. Use commas to separate thousands. Use to...

The OMEGA Corporation has been presented with an investment opportunity that will yield cash flows of...

The OMEGA Corporation has been presented with an investment opportunity that will yield cash flows of $60,000 per year in Years 1 through 4, $70,000 per year in Years 5 through 9, and $80,000 in Year 10. This investment will cost the firm $300,000 today, and the firm’s cost of capital is 10 percent. Assume cash flows occur evenly during the year, 1/365th each day. What is the payback period for this investment? a. 5.23 years b. 4.86 years c....

Find the present value of the following stream of cash flows, assuming that the firm's opportunity...

Find the present value of the following stream of cash flows, assuming that the firm's opportunity cost is 12 percent. What would be the future value of those cash flows? Year Amount 1 $10,000 2 35,000 3 24,000 4 53,000

The Seattle Corporation has been presented with an investment opportunity which will yield cash flows of...

The Seattle Corporation has been presented with an investment opportunity which will yield cash flows of $30,000 per year in Years 1 through 4, $35,000 per year in Years 5 through 9, and $40,000 in Year 10. This investment will cost the firm $100,000 today, and the firm's cost of capital is 10%. Assume cash flows occur evenly during the year. The discounted payback period is A. 3.72 years. B. 4.26 years. C. 5.23 years. D. 4.35 years.

Dow Chemical has been presented with an investment opportunity which will yield end of year cash...

Dow Chemical has been presented with an investment opportunity which will yield end of year cash flows of $3,350 per year in Years 1 through 4, $3,450 per year in Years 5 through 9, and $8,800 in Year 10. This investment will cost the firm $6,850 today, and the firm's required rate of return is 7 percent. What is the NPV for this investment? Group of answer choices $19,762.30 $–1,976.23 $21,738.53 $17,786.07 $23,714.76 Bristol Myers Squibb has been presented with...

Home Depot has been presented with an investment opportunity that will yield end-of-year cash flows of...

Home Depot has been presented with an investment opportunity that will yield end-of-year cash flows of $45,000 per year in years 1 through 4, $38,000 per years 5 through 9, and $42,000 in year 10. This investment will cost the firm $185,000 today, and the firm's cost of capital is 6%. What is the NPV for this investment? Please include formula and numbers used.

The Terug Corporation has been presented with an investment opportunity which will yield end-of-year cash flows...

The Terug Corporation has been presented with an investment opportunity which will yield end-of-year cash flows of $30,000 per year in Years 1 through 4, $35,000 per year in Years 5 through 9, and $40,000 in Year 10. This investment will cost the firm $150,000 today, and the firm's cost of capital is 10 percent. What are the NPV, IRR and MIRR values for this investment? a. NPV $135,984; IRR 17.07%; MIRR 11.27% b. NPV $18,023; IRR 16.24%: MIRR 13.27%...

Rachel Corporation was started in 2015 with a cash investment of $20,000. You are presented with...

Rachel Corporation was started in 2015 with a cash investment of $20,000. You are presented with the following accounts for Rachel (in thousands): 2016 2015 2016 2015 Net Sales 400 350 Retained earnings 180 130 Cost of Goods Sold 140 125 Inventory 118 85 Tax expense 55 50 Operating expenses 40 35 Long-term debt 50 0 Accounts payable 67 45 Allowance for doubtful accounts 2 1 Interest expense 15 0 Cash 25 5 Long-term deferred taxes 8 5 Depreciation expense...

You are trying to value the following investment opportunity: The investment will cost you $24,197 today....

You are trying to value the following investment opportunity: The investment will cost you $24,197 today. In exchange for your investment, you will receive monthly cash payments of $5,014 for 10 months. The first payment will occur at the end of the first month. The applicable effective annual interest rate for this investment opportunity is 8%. Calculate the NPV of this investment opportunity. Round to two decimals (do not include the $-sign in your answer).

Subjects