Solution-Appropriate rate of return on a low risk

Appropriate rate of return on a low risk

Assignment Help Finance Basics

Reference no: EM132554548

You are negotiating to make a 7-year loan of $25,000 to Breck Inc. To repay you, Breck will pay $2,500 at the end of Year 1, $5,000 at the end of Year 2, and $7,500 at the end of Year 3, plus a fixed but currently unspecified cash flow, X, at the end of each year from Year 4 through Year 7. Breck is essentially riskless, so you are confident the payments will be made. You regard 4% as an appropriate rate of return on a low risk but illiquid 7-year loan. What cash flow must the investment provide at the end of each of the final 4 years, that is, what is X?

Reference no: EM132554548

Questions Cloud

How the number of years to maturity and coupon rate affect : Price each bond and explain how the number of years to maturity and the coupon rate affect the current price of bonds. Assume a YTM of 7%.

Make an additional final payment : Your uncle will sell you his bicycle shop for $250,000, with seller financing, at a 8.0% nominal annual rate. The terms of the loan would require you to make

Tilden woods corporation common stock : The firm's beta is 1.60. The rate on a 10-year Treasury bond is 2.93 percent, and the market risk premium is 6.13 percent.

What value will the asset required in the books of bucks ltd : R205 000 in the records of lean Ltd. The fair value of machine Z is estimated to be R212 000. At what value will the Asset required in the books of Bucks Ltd?

Appropriate rate of return on a low risk : What cash flow must the investment provide at the end of each of the final 4 years, that is, what is X?

Crime and punishment before the civil war : Explain the patterns of crime and punishment before the Civil War. What kinds of violent trends exist in your region?

Demonstrate what is the project net present value : What is the project's net present value? A company is considering the purchase of a copier that costs RM50,000. Assume the required rate of return is 10%

HUMS 1051 Indigenous Australians: Culture and Colonisation : HUMS 1051 Indigenous Australians: Culture and Colonisation Assignment Help and Solution, University of South Australia - Assessment Writing Service

Calculate the amount of income tax expense as at december : Calculate the 2019 Consolidated Net Income as at December 31, including the share attributable to the non-controlling interest.

User Account

All Pages

Appropriate rate of return on a low risk

Reference no: EM132554548

Reference no: EM132554548

Questions Cloud

Reviews

Write a Review

Finance Basics Questions & Answers

Financial reporting and analysis

A report on financial accounting

Describe the types of financial ratios

Differences between sole proprietorship and corporation

Prepare a cash budget statement

What are the implied interest rates

State pricing theory and no-arbitrage pricing theory

Small business administration

Effect of financial leverage

Evaluate the basis for the payment to the lender

Importance of opps, ipps, mpfs and dmepos

Time value of money

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT