Calculation of net present value with given cash flow

Assignment Help Finance Basics
Reference no: EM1313234

Calculation of net present value with given cash flow and probability

A firm's weighted average cost of capital is 10% and has a $4000 project with the following estimates of cash flows under three possible states of nature. The project can be liquidated in year 2 at a cost of $400 in all three states of nature. Should the company undertake the project? If a real option exists, determine its value. Support your conclusion quantitatively.

Reference no: EM1313234

Questions Cloud

Expalining the axial musculature: : Which of following are true of axial musculature:It arises elsewhere, however inserts on the axial skeleton. It makes up 40 percent of the body musculature.
Share of gdp is composed of consumption : Illustrate what share of GDP is composed of consumption. Illustrate what share of GDP is composed of investment.
Evaluation of current price per share : Evaluation of Current price per share and Supernormal Growth Dividend
What is the distance between town and john : Two crates, of mass 75.0 kg and 109 kg, are in contact and at rest on a horizontal surface. A 732 N force is exerted on the 75.0 kg crate. What is the force the each crate exerts on the other.
Calculation of net present value with given cash flow : Calculation of net present value with given cash flow and probability and Should the company undertake the project
Equilibrium wage is higher or lower than two : Do wages clear when the wage equals two. Do we know whether the equilibrium wage is higher or lower than two.
Result of regression and estimating demand function : From the regression output, estimate the demand function when income is $40,000 and price is $2 per gallon. Explain the result in terms of R-square, T-test, F-statistic, and signs of each X variables.
Find rex''s direct materials price variance : Compute the Variance analysis of direct Materials - Find Rex's direct materials price variance
Posterior group of axial muscles : Which of the following is the most posterior group of axial muscles? Muscles of the shoulder girdle. Muscles of the head and neck. Muscles of the pelvic floor

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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