Calculate the net present value of a business deal

Assignment Help Other Subject

Reference no: EM13981378

1. Calculate the net present value of a business deal that costs $2500 today and will return $1500 at the end of this year and $1700 at the end of the following year. Use an interest rate of 13%.

2. Find the net present value of a project that has cash flows of - $ 12,000 in Year 1, +$5000 in Years 2 and 3, -$2000 in Year 4, and +$6000 in Years 5 and 6. Use an inter est rate of 12%. Find the interest rate that gives a net present value of zero.

3. A friend asks you for a loan of $1000 and offers to pay you back at the rate of $90 per month for 12 months.

a. Using an annual interest rate of 10%, find the net present value (to you) of loaning your friend the money. Repeat, using an interest rate of 20%.

b. Find an interest rate that gives a net present value of 0. The interest rate for which NPV = 0 is often called the internal rate of return.

Reference no: EM13981378

Questions Cloud

What is globalization : What is globalization (please define it both as a process and outcome)? What factors can you identify in explaining why globalization occurred? How do you assess its impact upon both rich countries and poor ones, in particular, the issue of inequalit..

What is the speed of spaceship b : A person is lying in bed. You are flying by in a spaceship at .800c relative to the person in bed; the spaceship is flying parallel to the long dimension of the bed (from tbe head of the bed to the foot). Which of the following is true, according ..

Aggregate supply curve is influenced by the price level : The long-run aggregate supply curve is influenced by the price level. The opportunity cost of holding real money balances is the: Economic variables that generally turn down after a recession begins and turn back up after the recovery starts are call..

What possible red flags of fraud exist : As the external audit manager, what issues, if any would concern you about ABC Health Care Equipment Company?

Calculate the net present value of a business deal : Calculate the net present value of a business deal that costs $2500 today and will return $1500 at the end of this year and $1700 at the end of the following year. Use an interest rate of 13%.

Exploring the use of the defense insanity : Write a one to two page paper exploring the use of the defense "insanity." Please use one (or more) of the following examples for you analysis

Health insurance by employers as a fringe-benefit reduces : Offering health insurance by employers as a fringe-benefit reduces the problem of adverse selection.Too little insurance means that people bear a lot of risk, too much insurance means that people will take inadequate care. A limited warranty is a sig..

Comparison the product prices in pakistan and india : Write a paper in at least 2000 words on Comparison the Product Prices in Pakistan & India. Write a brief overview about Pakistan and India. What are the major import and export products of Pakistan and India. Name the major countries who exports the ..

Affecting the decisions of local law enforcement officers : Determine at least two (2) aspects in which ethics, morality, and law differ in regards to affecting the decisions of your local law enforcement officers

User Account

All Pages