Salvatore has the opportunity to invest in a scheme which will pay $7,500 at the end...

Salvatore has the opportunity to invest in a scheme which will pay

$7,500

at the end of each of the next 5 years. He must invest

$15,000

at the start of the first year and an additional

$15,000

at the end of the first year. What is the present value of this investment if the interest rate is

4%?

Solutions

Expert Solution

PV FACTOR = 1/(1+r)^n

FOR FIRST YEAR = 1/(1+0.04)^1 = 0.96154 AND SO ON

jeff jeffy answered 5 months ago

Next > < Previous

Related Solutions

You are given an opportunity to invest in a scheme that will pay you 3 end-of-period...

You are given an opportunity to invest in a scheme that will pay you 3 end-of-period cash flows at the end of years 3, 4, 5 and another three cash flows at the end of years 8, 9, 10. You require 12% APR compounded monthly as your MARR. What is the most you are willing to pay for this opportunity? A = $1000 in all cases. a) Show your cash flow diagram from your standpoint. b)Show your equivalence equation in...

VR Corporation has the opportunity to invest in a new project, the details of which are...

VR Corporation has the opportunity to invest in a new project, the details of which are shown below. What is the Year 1 cash flow for the project? Sales revenues, each year $42,500 Depreciation $10,000 Other operating costs $17,000 Interest expense $4,000 Tax rate 25.0%

1) A company has an opportunity to invest in a project which will earn cash flows...

1) A company has an opportunity to invest in a project which will earn cash flows of $100,000 in the first year, $200,000 in the second year and $350,000 in the third year. If their investor's required return is 12%, what is the most the company should pay for the project? (Enter only numbers and decimals in your response. Round to 2 decimal places.) 2) A business has an project that will bring in annual cash flows of $250,000 for...

You have been offered the opportunity to invest in a project that will pay $4,240 per...

You have been offered the opportunity to invest in a project that will pay $4,240 per year at the end of years one through three and $6,676 per year at the end of years four and five. These cash flows will be placed in a saving account that pays 10.03 percent per year. What is the future value of this cash flow pattern at the end of year five? please answer without CHARTS.

You have been offered the opportunity to invest in a project that will pay $2,310 per...

You have been offered the opportunity to invest in a project that will pay $2,310 per year at the end of years one through three and $10,109 per year at the end of years four and five. If the appropriate discount rate is 17.0 percent per year, what is the present value of this cash flow pattern? Round the answer to two decimal places.

You have been offered the opportunity to invest in a project that will pay $2,526 per...

You have been offered the opportunity to invest in a project that will pay $2,526 per year at the end of years one through three and $10,052 per year at the end of years four and five. If the appropriate discount rate is 12.2 percent per year, what is the present value of this cash flow pattern?

Firm BCD has the opportunity to invest in one of two mutually exclusive machines, which can...

Firm BCD has the opportunity to invest in one of two mutually exclusive machines, which can both produce the same product. Machine A has a life of 9 years, costs $12 million and will produce after-tax inflows of $2.5 million per year at the end of each year. Machine B has a life of 7 years, costs $15 million and will produce after-tax inflows of $3.5 million per year at the end of each year. Assuming that the machines can...

1.A classmate offers you the chance to invest into a businesses opportunity wherein you would pay...

1.A classmate offers you the chance to invest into a businesses opportunity wherein you would pay $60 for a crypt-currency and are responsible for re-selling those currencies to other students. Any revenue you make is yours to keep. - There is a 33% chance you cannot sell the currency and you lose $60. - There is a 66% chance you sell the currency for $90. Is this a good investment? Y.Yes N.No 2.Stock represents what? A.A tradable investment B.Wall Street...

3. The Tassel Ltd. has been presented with an investment opportunity which will yield end of...

3. The Tassel Ltd. has been presented with an investment opportunity which will yield end of year revenue of $20,000 per year in Years 1 through 4, $25,000 per year in Years 5 through 9, and $3 4. Using the information in Q3, if the tax rate is 30%, and Tassel uses prime-cost approach for depreciations with the salvage value of $20,000, do you think Tassel should implement this investment and why? Please demonstrate your answer by showing your capital...

#21) Troy will receive $7,500 at the end of year 3. At the end of the...

#21) Troy will receive $7,500 at the end of year 3. At the end of the following two years, he will receive $9,000 and $12,500, respectively. What is the future value of these cash flows at the end of year 5 if the interest rate is 8 percent? $33,445 $35,622 $30,968 $35,255 $28,738 #39) Cast Out Co. invested $37,900 in a project. At the end of three years, the company sold the project for $62,500. What annual rate of return did...

Subjects