Determine the present value for the venture

Reference no: EM1360424

The LowTec Corporation is about to begin producing and selling its prototype product. Annual cash flows for the next five years are forcasted as:
1 ($50,000)
2 ($20,000)
3 $100,000
4 $400,000
5 $800,000

Investors in LowTec have an expected rate of return of 30 percent on their investment until year 5, when the rate of return is expected to drop to 18%. The perpetuity growth rate for cash flows after Year 6 is expected to be 7 percent.

Determine the present value for the LowTec venture.

Reference no: EM1360424

Questions Cloud

Create a job description from the job analysis : Explain your method of collecting the information for the job analysis and create a job description from the job analysis.

Write lisp function to reverse order of the elements in list : Write a Lisp function that: given a two-element list, reverse the order of the elements in the list (cannot use the LISP reverse function).

Find the force constant of the spring : assume the roller coaster (h1 = 34 m, h2 = 10 m, h3 = 20) passes point A with a speed of 2.00 m/s. If the average force of friction is equal to one sixth of its weight, with what speed will it reach point B? The distance traveled is 45m.

Discuss a real world example that could or has already : Discuss a real world example that could, or has already, caused a shift in either the AD (aggregate demand) or SRAS (short run aggregate supply) curves for the US economy, or some other country.

Determine the present value for the venture : The LowTec Company is about to begin producing and selling its prototype product. Annual cash flows for the next five years are forcasted as:

Behavioural-based interviews : Based on the list of behavioural based questions that are listed on the following link, do you think there are any weaknesses to this type of interview?

Explain what is the maximum amount of new loans : Explain what is the maximum amount of new loans that this bank can make. Show in column 1 how the bank's balance sheet will appear after the bank has lent this additional amount.

Determine the value of a privately held : Determine the value of a privately-held firm based on the following data: total market value of a comparable firm is $200,000; net income of a comparable firm is $40,000;

Estimate the average power output on the way up : estimate the average power output on the way up. A speedboat moving at 39 m/s approaches a no-wake buoy marker 100 m ahead. The pilot slows the boat with a constant acceleration of -3.15m/s2 by reducing the throttle.

User Account

All Pages