Question
In: Finance
1. If your required rate of return is 8% per year, what is the present value...
| 1. If your required rate of return is 8% per year, what is the present value of the above cash flows? (Cash Flow 1) | |||||||||
| 2. If your required rate of return is 8% per year, what is the future value of the above cash flows? (Cash Flow 1) | |||||||||
| 3. Suppose that you are offered another investment that is identical, except the cash flows are reveresed. Compute the PV and FV, is this investment worth more or less than questions #1 and #2? (Cash Flow 1 compared to Cash Flow 3 PV and FV) | |||||||||
| 4. If you paid $150,000 for the original investment, what average annual rate of return would you earn? What return would you earn on the reversed cash flows? (Cash Flow 4 and Reversed Cash Flow 4) | |||||||||
| Given the following set of cash flows: | Reversed | |||||
| Reversed | Cash Flow 4 | Cash Flow 4 | ||||
| Period | Cash Flow 1 | Cash Flow 3 | $ (150,000) | $ (150,000) | ||
| 1 | $ 40,000 | $ 5,000 | $ 40,000 | $ 5,000 | ||
| 2 | $ 35,000 | $ 10,000 | $ 35,000 | $ 10,000 | ||
| 3 | $ 30,000 | $ 15,000 | $ 30,000 | $ 15,000 | ||
| 4 | $ 25,000 | $ 20,000 | $ 25,000 | $ 20,000 | ||
| 5 | $ 20,000 | $ 25,000 | $ 20,000 | $ 25,000 | ||
| 6 | $ 15,000 | $ 30,000 | $ 15,000 | $ 30,000 | ||
| 7 | $ 10,000 | $ 35,000 | $ 10,000 | $ 35,000 | ||
| 8 | $ 5,000 | $ 40,000 | $ 5,000 | $ 40,000 | ||
Solutions
jeff jeffy answered 1 year agoRelated Solutions
a) What is the present value of $1,200 per year, at a discount rate of 8...
a) What is the present value of $1,200 per year, at a discount
rate of 8 percent, if the first payment is received 9 years from
now and the last payment is received 28 years from now?
b) ABC Co. wants to sell you an annuity that will pay you $500
per quarter for 25 years. You want to earn a minimum rate of return
of 5.1 percent. What is the most you are willing to pay today to
buy...
What is the present value of $2,625 per year at a discount rate of 8%, if...
What is the present value of $2,625 per year at a discount rate
of 8%, if the first payment is received six years from now and the
last payment is received 20 years from now?
PLEASE USE excel
What is the present value of $1,200 per year, at a discount rate of 8 percent,...
What is the present value of $1,200 per year, at a discount rate
of 8 percent, if the first payment is received 9 years from now and
the last payment is received 28 years from now?
What is the present value of RM2,400 a year at a discount rate of 8% if...
What is the present value of RM2,400 a year at a discount rate
of 8% if the first payment is received 7years from now and you
received a total of 25 annual payments?
What is the present value of $1,400 a year at a discount rate of 8 percent...
What is the present value of $1,400 a year at a discount rate of
8 percent if the first payment is received 7 years from now and you
receive a total of 25 annual payments?
Question 5 options:
$9,417.69
$9,238.87
$9,333.33
$9,420.12
$9,881.72
What is the present value of $2,100 a year at a discount rate of 8 percent...
What is the present value of $2,100 a year at a discount rate of
8 percent if the first payment is received 7 years from now and you
receive a total of 23 annual payments?
What is the present value of a constant perpetuity of 25 per year where the required...
What is the present value of a constant perpetuity of 25 per
year where the required rate of return is 5%?
What is the present value of a perpetuity of $80 per year if the discount rate...
What is the present value of a perpetuity of $80 per
year if the discount rate is 11%?
as the minimum required rate of return increases for an investment project, the net present value...
as
the minimum required rate of return increases for an investment
project, the net present value if the project...
a. increase
b. does not change
c. decreases
d. becomes positive
What is the relationship among present value, net present value, and internal rate of return? Is...
What is the relationship among present value, net
present value, and internal rate of return? Is there a consistent
relationship at all possible values for these
measures?
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- If companies have both a BCP and a DRP in place do they need to have...
- DESCRIBE WHAT THE FOLLOWING JAVA CODE DOES: public class Main{ public static void main(String[] args) {...
- Pete's Power Pizzas sells a chocolate/tofu filled pastry. Pete's currently sells this pastry for $13.15, and...
- List five foods from your culture or your family food traditions that are prepared using a...
- How does Mead distinguish between the body and the self? How is the self both a...
- Assume you were asked to interview a researcher about the merits and weaknesses of quasi-experimental designs....
- Consider the group G = {1, −1, i, −i, j, −j, k, −k} under multiplication. Here...
ADVERTISEMENT