Discount rate less is the present value

Assignment Help Finance Basics
Reference no: EM132375699

Rate 20%

Time Cashflow PV

0    55,000  55,000   

1    -30,000 -25,000

2   -35,000 -24,305.56

Calculating IRR 11.58% NPV 5,694.44

NPV should be negative,as it exceeds 11.58%, NPV is zero at that rate, higher the discount rate less is the present value. Why when NPV is calculates it gives 5,694.44 and it's not negative? Should it be calculated at 11.58%?

Reference no: EM132375699

Questions Cloud

Will this be considered a qualified disclaimer : Mary inherited her best friend's Corvette. She always thought it was her dream car, but after driving it for a week, she found the gas was
Which is the wisest course of action for trevone to take : He wants to use it for someone else's benefit, and considers donating the stock to his favorite charity. Of the following, which is the wisest course of action
Calculate the size of these payments : A $9,200 loan is to be repaid in three equal payments occurring 62, 180, and 300 days, respectively, after the date of the loan.
How much interest was owed on june 3 : How much interest was owed on June 3? (Do not round your intermediate calculations and round the final answer to 2 decimal places.)
Discount rate less is the present value : Why when NPV is calculates it gives 5,694.44 and it's not negative? Should it be calculated at 11.58%?
Determining the federal tax liability : What are some (legal) ideas on how to reduce their state and/or federal tax liability each year?
What is the firm tax liability : Last year, California Sushi and Such (CSS) had sales of $65 million. The firm's operating expenses amounted to $20 million and costs of goods sold totaled
Explain to what extent the corporation shareholders : Explain to what extent the corporation shareholders might feel the corporation breached any measures of an entity of the highest ethical standards.
What is the current share price : If the required return is 14 percent, what is the current share price?

Reviews

Write a Review

Finance Basics Questions & Answers

  Determine the joint probability of each scenario

Incorporating Country Risk in Capital Budgeting How could a country risk assessment be used to adjust a project's required rate of return? How could such an assessment be used instead to adjust a project's estimated cash flows?

  The objective of managing current assets and liabilities

If a firm purchases materials on credit and thus has accounts payable, its cash conversion cycle will be. The most important form of short-term business financing is. The factor, unlike the commercial finance company

  Midland utilities has outstanding a bond

Midland Utilities has outstanding a bond

  Which project would bondholders prefer and why

Assuming that the investors are concerned only about expected returns, which project would stockholders prefer? Why? Which project would bondholders prefer? Why?

  What is the relationship between eva and economic profit

Fortune Magazine published a 1998 interview with Peter Drucker ("Peter Drucker Takes the Long View: The Original Management Guru shares his vision of the future with Fortune's Brent Schlender")

  Calculate capital gains yield and total real return

Assume a stock had an initial price of $84 each share, paid a dividend of $2.25 each share during year, and had an ending share price of $92. What was the dividend yield?

  Low financing or cash back

A car company is offering a choice of deals. You can receive $1,000 cash back on the purchase, or a 2 percent APR, 5-year loan.

  Required amount of payment

If he can earn 6% interest annually, what is the required amount of each payment?

  Calculate the historical growth rate in earwigs

Calculate the historical growth rate in earwigs. Calculate the net expected dividend per share, D1. Assume that the past growth rate will continue. What is Radon's cost of equity, rs?

  Compute the turnover for the accounts receivable and

analyzing the impact of selected transactions on receivable and inventory turnover - procter amp gamble is a

  What is the internal growth rate

Last year Lakesha's Lounge Furniture Corporation had an ROA of 7.5% and a dividend payout ratio of 25%. What is the internal growth rate?

  Describe what is the value of the firm

Find what will the value be if Corrado converts to 50% debt and evaluate what will the value be if Corrado converts to 100% debt?

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