Combinations of discount rates and times

Assignment Help Financial Management
Reference no: EM131015952

Compute the present value of a $1,000 cash flow for the following combinations of discount rates and times:

r = 6 percent, t = 5 years.

r = 7 percent, t = 3 years.

r = 4 percent, t = 10 years.

r = 4 percent, t = 20 years.

Reference no: EM131015952

Questions Cloud

Process for preparing pro forma income statements : Describe the process for preparing pro forma income statements and balance sheets. How are these statement analyzed to make cogent evaluations?
Financial manager cope with fluctuations in the cash budget : Describe short-term cash planning and how the cash budget is put together. Why does the firm needs to have this information? How does the financial manager cope with fluctuations in the cash budget?
Markets efficiency is affected by the number of transactions : Do you think a market's efficiency is affected by the number of transactions that take place, the amount of time it takes to complete the transaction and the number of buyers and sellers present? How do these questions relate to the Primary and Secon..
What is the yield to maturity for bonds : Blue Crab, Inc. plans to issue new bonds, but is uncertain how the market would set the yield to maturity. The bonds would be 19-year to maturity, carry a 13.29 percent annual coupon, and have a $1,000 par value. Blue Crab, Inc. has determined that t..
Combinations of discount rates and times : Compute the present value of a $1,000 cash flow for the following combinations of discount rates and times:
What is the companys return on equity : Net profit magin = .053%. Equity Multiplier = 2.48. Total assets= $99 million. Sales=$159 million. What is the companys return on equity in % form.
Annual revenue-what is the present value of the savings : Your company will generate $63,000 in annual revenue each year for the next seven years from a new information database. If the appropriate interest rate is 7.50 percent, what is the present value of the savings?
Is this growth rate sustainable : In the TV episode Tim mentions that Grease Monkey Wipes have been on the market for a few months and they have sold 7,600 units with gross revenue is $7,400. In the update video Erin mentions that Grease Monkey Wipe has sold over 200,000 units and th..
If the yields on treasury bonds rise significantly : If the yields on treasury bonds rise significantly but there is no change in the outlook for economic growth and profits (and no change in investor risk aversion level or required risk premium) the stock market should

Reviews

Write a Review

Financial Management Questions & Answers

  Return on assets and return on common shareholders equity

When considering the difference between return on assets (ROA) and return on common shareholders' equity (ROE), Preferred dividends are deducted from the numerator when calculating ROE, but not when calculating ROA.

  Describe two phases of the capital budgeting process

Identify and briefly describe two phases of the capital budgeting process. (b) Would saving time by skipping one of these phases in the capital budgeting process make sense financially?

  Ending balance of paid-in capital tax effect of stock option

The Johnson Co. grants options on 5,000 shares of its common stock. The fair market value of each option on the grant date is $3 per share. The exercise price is $2. The tax rate (all years) is 20%. What is the ending balance of Paid-in capital tax e..

  What will be the new operating cash flow

A proposed project has fixed costs pf $100,000 per year. The operating cash flow at 8,000 units is $89,000. Ignoring the effect of taxes, what is the degree of operating leverage? Round answer to 4 decimal places. If units sold rise from 8,000 to 8,5..

  Consistent with the semi-strong form of market efficiency

Geothermal corporation issued a press release before the stock market opened announcing that its earnings are above last year’s earnings. Explain how each of the following individual scenarios could be consistent with the semi-strong form of market e..

  What is the value of stock currently paying dividend

What is the value of a stock currently paying a dividend of $1.50 that is growing annually at 8% when investors require a rate of return of 12%?

  Borrowing rates affect the calculation of the nal

How does the fact that the lessor and lessee have different borrowing rates affect the calculation of the NAL?

  Evaluating lump sums and annuities

Crissie just won the lottery, and she must choose between three award options. She can elect to receive a lump sum today of $60 million, to receive 10 end-of-year payments of $9.3 million, or 30 end-of-year payments of $5.3 million. If she expects to..

  What is the companys current stock price

The Francis Company is expected to pay a dividend of D1 = $1.25 per share at the end of the year, and that dividend is expected to grow at a constant rate of 6.00% per year in the future. Francis cost of equity is 10.33%. What is the company's curren..

  Used by the company to hedge its exposure

A US company knows it will have to pay 3 million euros in three months. The current exchange rate is 1.4500 dollars per euro. Discuss how forward and options contracts can be used by the company to hedge its exposure.

  Term insurance policy

Kerri purchased a term insurance policy when she had high life insurance needs and limited income. Now she can afford whole life insurance. What term life insurance provision will permit Kerri to switch her term insurance to whole life insurance with..

  Represents efficient credit-collection policy

You are analyzing two companies that manufacture electronic toys – Like Games Inc. and Our Play Inc. Like Games was launched eight years ago, whereas Our Play is relatively new company that has been operation for only the past two years. (high or low..

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