Cf required to provide a given rate of return

Assignment Help Finance Basics
Reference no: EM132003201

CF required to provide a given rate of return

You have been offered a 5-year investment at a price of $40,000. It will pay $3,250 at the end of Year 1, $4,500 at the end of Year 2, and a fixed but currently unspecified cash flow, X, at the end of Years 3 through 5. The payer is essentially riskless, so you are sure the payments will be made, and you regard 5% as an appropriate rate of return on riskless 5-year investments. What cash flow must the investment provide at the end of each of the final 3 years, that is, what is X?

Reference no: EM132003201

Questions Cloud

Nominal annual interest rate : If you just deposited $4,000 in a bank account that pays a 2.0% nominal annual interest rate, compounded quarterly.
Expected annual return : If the account has an expected annual return of 10%, how much will Anne expect to have in her account on her 65th birthday?
Stock fund with an expected annual return : Teresa has her money invested in a stock fund with an expected annual return of 9%. How many years after Teresa retires will Mike retire?
Monthly vs quarterly compounding : Northeast Regional Bank offers a 4.8% nominal annual interest rate, compounded monthly on its savings accounts, while Southwest Regional Bank
Cf required to provide a given rate of return : You have been offered a 5-year investment at a price of $40,000. It will pay $3,250 at the end of Year 1, $4,500 at the end of Year 2, and a fixed
What is the present value of received : If the three-year present value annuity factor is 2.673 and the two-year present value annuity factor is 1.833, what is the present value
Swiss vollgeld initiative : Britain, Switzerland and most other countries in the world currently use the fractional reserve banking system. The Swiss National Bank (SNB)
What is the difference in the pv annuity formula : What is the difference in the PV annuity formula between payments starting on the day and payments starting at the end of the year?
What is the irr for project : The required return is 15 percent. What is the IRR for this project?

Reviews

Write a Review

Finance Basics Questions & Answers

  Suppose that the current 180-day interbank eurodollar rate

suppose that the current 180-day interbank eurodollar rate is 9 all rates are stated on an annualized basis. if next

  Determine the monthly payment

Borrow $300,000 for 9 years at a 7% rate. Loan will negatively amortize $40,000 by the end of the term. Determine the monthly payment.

  Nell corp is expanding fast and currently needs to retain

nell corp is expanding fast and currently needs to retain all of earnings hence it does not pay dividends. however

  Computation of capital generation at a sales level

Computation of capital generation at a sales level and How much capital will Longfellow generate by this sale

  How do changes in the mix of products impact breakeven

The overall concept of CM is pretty straightforward- it is how much each unit contributes to covering fixed costs and eventually, profit, after variable costs are taken care of.

  At what price will your bond be sold

What would be the amount of your gain or loss had the treasurer originally purchased a bond with a 4-year rather than a 20-year maturity? (Assume all characteristics of the bonds are identical except their maturity periods.)

  Determine who would be responsible for the fees

Andrea technologies limited is a rapidly growing software company. it was started three years ago using capital provided by the founder's family.

  Cmpare current 2013 market price of the stock and stock

in the world of trendsetting fashion instinct and marketing savvy are prerequisites to success. michael geno had both.

  Why central banks buy either their own currency

Describe when and why central banks buy either their own currency or the currency of another nation in an effort to control exchange rates and what did the central banks do to stabilize the financial systems in 2007-2009?

  Important part of developing and implementing a strategy

Understanding supply chain and how the consumer can play a critical role in the supply chain is an important part of developing and implementing a strategy. There are many products and services today where the target customer is part of the supply..

  Discuss the differences between static and flexible budgets

Discuss the differences between static and flexible budgets.- Why are flexible budgets superior to static budgets for performance reporting?

  Relevant examples from real companies

In working out your responses to the Discussion Question, you should choose examples from your own experience or find appropriate cases on the Web that you can discuss.

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