User Account

All Pages

Find the range of npvs, and subjectively compare the risks

Assignment Help Finance Basics
Reference no: EM131108755

James Secretarial Services is considering the purchase of one of two new personal computers, P and Q. The company expects both to provide benefits over a 10-year period, and each has a required investment of $3,000. The firm uses a 10% cost of capital. Management has constructed the following table of estimates of annual cash inflows for pessimistic, most likely, and optimistic results.
43_w.jpg

a. Determine the range of annual cash inflows for each of the two computers.

b. Construct a table similar to this for the NPVs associated with each outcome for both computers.

c. Find the range of NPVs, and subjectively compare the risks associated with purchasing thesecomputers.

Reference no: EM131108755

Questions Cloud

What is the cost of voting in an election : What is the cost of voting in an election? What is the main factor preventing a large community from influencing policy in the same way as a special interest group? Why might legislators vote to impose a tariff on Egyptian cotton, when consumers in t..
Center of mass of the solid bounded : Find the center of mass of the solid bounded above by z=4 , on the sides by z=seq root of 25-x^2-y^2, and outside the cylinder x^2+y^2=16 . (density = seq root x^2 +y^2)
Magnitude of the velocity of the particle : Find the magnitude of the velocity of the particle for the specific value of t.The magnitude is approximately nothing.(Type an integer or decimal rounded to two decimal places as needed.)
What is the output you should produce : Phillip Haynes is the controller of a company that has the sole authority to manufacture your product. The inverse market demand curve is P=900-1.5Q. Your total cost equation is C(Q)=2Q+Q2. What is the output you should produce, the price you should ..
Find the range of npvs, and subjectively compare the risks : Determine the range of annual cash inflows for each of the two computers. Construct a table similar to this for the NPVs associated with each outcome for both computers. Find the range of NPVs, and subjectively compare the risks associated with purch..
Prepare the journal entry to record income tax payable : Prepare the journal entry to record income tax payable, deferred taxes, and income tax expense for 2010.
Communication and representing the interests : Part of being an effective project manager is communication and representing the interests of the different stakeholders regarding the project. Stakeholder interests can often fluctuate during a life cycle of the project.
Define a code generator for this ast structure : Define a code generator for this AST structure. (You may generate JVM code or code for any other computer architecture).
Describe the ways in which election ballots : Describe the ways in which election ballots have changed over time, and why this benefits and matters to the modern voter. How, in both local/state and national elections does an individual vote contribute to the election of a candidate

Reviews

Write a Review

Finance Basics Questions & Answers

  What is a multinational corporation

What is a multinational corporation and why do firms expand into other countries? What are exchange rate risks?

  Discuss the major financial statements in detail what

draft of financial statements and accounting policiesthe financial analysis final project focuses onthe process and

  Amount of change between levels

Compare the EPS at the different leverage levels, and the amount of change between levels as leverage increases. What happens to the effect of more debt as leverage increases from a little to a lot?

  What required return must investors be demanding on ontario

Ontario Wine just paid a dividend of $1.50 on its stock, which currently sells for $50 per share. What required return must investors be demanding on Ontario Wine stock?

  Determine the expected return on a portfolio

Suppose you are planning three stocks with the following expected dividends yields and gains, Determine the expected return on a portfolio consisting of 40% in stock A and 60 % in stock B

  Use royalty rate contracts or fixed-fee contracts

Contracts Does your firm use royalty rate contracts or fixed-fee contracts? Describe the incentive effects of the contracts. Should you change the contract from one to the other? Compute the profit consequences of changing the contract.

  Calculate the standard deviation of expected returns

Calculate the standard deviation of expected returns, ?X, for Stock X (?Y = 19.83%.) Round your answer to two decimal places.

  Given the following cash flows for four projects calculate

given the following cash flows for four projects calculate the net present value using a discount rate of 12 a year.

  A japanese company has a bond outstanding that sells for 94

a japanese company has a bond outstanding that sells for 94 percent of its ?100000 par value. the bond has a coupon

  If you put up 28000 today in exchange for a 825 percent

if you put up 28000 today in exchange for a 8.25 percent 15-year annuity what will the annual cash flow

  Describe the term bond valuation

Describe the term Bond valuation and what coupon rate should be set on the bond with warrants if the total package is to sell for $1,000

  Compute average annual rate of return

Suppose you are considering how to finance your child's college education. The child is 3 years old now so there are 15 years to go before your child enters college at age eighteen.

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd