Appropriate discount rate-what is the present value

Assignment Help Financial Management
Reference no: EM131025873

An investment will pay you $90,000 in three years. Assume the appropriate discount rate is 6.00 percent compounded daily.

Required:

What is the present value? (Do not include the dollar sign ($). Enter rounded answer as directed, but do not use the rounded numbers in intermediate calculations. Use 365 days in a year. Round your answer to 2 decimal places (e.g., 32.16).)

  Present value $   

Reference no: EM131025873

Questions Cloud

Primary difference between treasury bills and treasury bonds : The primary difference between U.S. Treasury bills and U.S. Treasury bonds is that the bills:
Determine average power and state whether power delivered : Consider the circuit shown in Figure. Determine the values of I1 and V2. For each of the sources, determine the average power and state whether power is delivered by or absorbed by the source.
Consider two stocks-expected return and standard deviation : Consider two stocks, Stock D, with an expected return of 11 percent and a standard deviation of 26 percent, and Stock I, an international company, with an expected return of 9 percent and a standard deviation of 19 percent. The correlation between th..
What is the approximate real rate of interest : Treasury bills are currently paying 5 percent and the inflation rate is 2.5 percent. What is the approximate real rate of interest? (Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Approximate real rate % What is the exact r..
Appropriate discount rate-what is the present value : An investment will pay you $90,000 in three years. Assume the appropriate discount rate is 6.00 percent compounded daily. What is the present value?
What turns ratio is required for the transformer : A transformer is needed that will cause an actual load resistance of 25Ω to appear as 100Ω to an ac voltage source of 240 V rms. Draw the diagram of the circuit required. What turns ratio is required for the transformer? Find the current taken fro..
A firm has a target debt to equity ratio : Junior Interiors market value capital structure of 62% Common Equity, 3% Preferred Stock (PS) and 35% Debt. The company does not pay dividends, and evaluates its operations as approximately 30% more risky than an “average” company in the industry. Wh..
Draw a diagram and find out equilibrium price and quantity : Draw a diagram and find out the equilibrium price and quantity. Suppose the government sets a price ceiling of $11. What will be the effect of such a policy: a shortage or a surplus of how much
Determine the power loss due to hysteresis : At a frequency of 60 Hz, the core loss of a certain coil with an iron core is 1.8 W, and at a frequency of 120 Hz, it is 5.6 W. The peak flux density is the same for both cases. Determine the power loss due to hysteresis and that due to eddy curre..

Reviews

Write a Review

Financial Management Questions & Answers

  What is market value of assets of firm

The book value of equity of a firm is $82 million and the market value of equity is $96 million. The face value of debt of the firm is $40 million and the market value of debt is $16 million. What is the market value of assets of the firm?

  Find k if her annual effective investment yield

Common stock X pays a dividend of $100 at the end of the first year, with each subsequent annual dividend being $10 more than the preceding one. Alice purchases the stock at a theoretical price to earn an expected annual effective yield of 10%. Immed..

  What is your annual rate of return for the three year period

Three years ago, you bought a 12% bond that had 7 years to maturity and a yield to maturity of 12%. Today (after the sixth interest payment), you sold the bond when it is yielding 15%. What is your annual rate of return for the three year period? All..

  Measure to the long term investor than yield to maturity

The current yield is a better measure to the long term investor than the yield to maturity. The major role played by earnings announcements in the valuation of a business (or project) is that earnings announcements are used to revise or refine your f..

  Draw up balance sheet and income statement

Draw up balance sheet and income statement.

  What is the price-earnings ratio of the company

No-Growth Industries pays out all of its earnings as dividends. It will pay its next $3 per share dividend in a year. The discount rate is 16%. What is the price-earnings ratio of the company?

  What is the best estimate of these bonds remaining life

Lloyd Corporation's 14% coupon rate, semi annual payment, $1,000 par value bonds, which mature in 30 years, are callable 5 years from today at $1,050. They sell at a price of $1,353.54, and the yield curve is flat. Assume that interest rates are expe..

  Factors that affect the corporate cost of capital

The Board Chair is concerned about factors that affect the corporate cost of capital for any business: the level of interest rates, tax rates, capital structure policy, and capital investment policy. Does the tax rate, cost of debt, or cost of equity..

  What is the most likely market price and p-e ratio

During the past few years, Swanson Company has retained, on the average, 70 percent of its earnings in the business. The future retention rate is expected to remain at 70 percent of earnings, and long-run earnings growth is expected to be 10 percent...

  Cash dividend to shareholders

Liberty Company has declared a $40,000 cash dividend to shareholders. The company has 5,000 shares of $20-par, 6% preferred stock and 10,000 shares of $15-par common stock. The preferred stock is cumulative. How much will be distributed to the prefer..

  Estimate value of asset expected to provide cash inflows

Laura Drake wishes to estimate the value of an asset expected to provide cash inflows of $3000 per year at the end of years 1 through 4 and $15000 at the end of year 5. Her research indicates that she must earn 10% on low risk assets, 15% on average ..

  Stock with a beta

You bought a stock with a beta of 1.4 and earned a return of 8.3%. Did you outperform the market if, during the same period, the market rose by 7.4% and you could have earned 5.4% by investing in a Treasury bill?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd