Find the year zero equivalent for this cash flow

Assignment Help Financial Management
Reference no: EM131050892

You receive $10,000 every five years, $2,000 every two years, $1,000 every year, and $500 per month for the next 100 years. Find the year zero equivalent for this cash flow if the interest rate is 24%. You must clearly show the factors used to solve the problem.

Reference no: EM131050892

Questions Cloud

Stablished college savings plan : Cary's wonderful parents established a college savings plan for him when he was born. They deposited $50 into the account on the last day of each month. The account has earned 10% compounded monthly, tax-free. Now he's off to State U. What equal amou..
What is your effective annual interest rate : A home mortgage with monthly payments for 30 years is available at 6% interest. The home you are buying costs $120,000, and you have saved $12,000 to meet the requirement for a 10% down payment. What is your monthly payment? If you move to a larger h..
What are the limitations of currency intervention : Explain the concept of currency intervention by central banks. illustrate with the example of a central bank attempting to defend a pegged rate in the face of a large capital outflows. What are the limitations of currency intervention?
What level of expected cash flows does make sense to abandon : Allied Products, Inc., is considering a new product launch. The firm expects to have annual operating cash flow of $6.9 million for the next 8 years. Allied Products uses a discount rate of 11 percent for new product launches. The initial investment ..
Find the year zero equivalent for this cash flow : You receive $10,000 every five years, $2,000 every two years, $1,000 every year, and $500 per month for the next 100 years. Find the year zero equivalent for this cash flow if the interest rate is 24%. You must clearly show the factors used to solve ..
Complete the using compound future value : Complete the following using compound future value. Round answers to nearest cent. time 12 years principal $15,000 rate 3 1/2% compounded annually what is teh amount? and interest?
Provide sufficient funds to support withdrawals : How do you need to invest now at an interest rate of 10% compounded annually to provide sufficient funds to support withdrawals of $5000 in one year, $2000 in four years, and $6,000 in eight years?
What would be the new market price of the bond : Assume 1 year has gone by and it is now Jan 1, 2012. Further assume you bought the bond for the price calculated in question 2 (Bond price $973.27) on Jan 1, 2011. Since then, market interest rates (and the discount rate) for this type of bond increa..
What is level of inventory current liabilities and assets : Soaring Eagles Corp. has total current assets of $11,522,000, current liabilities of $5,462,000 and a quick ratio of 0.77. What is its level of inventory?

Reviews

Write a Review

Financial Management Questions & Answers

  Why capm equation might be more relevant than other

Explain with a graph how SML is different from CML. Why CAPM equation might be more relevant than other equations when calculating required rate of return.

  Explain bankruptcy and its equity holders will be wiped out

Suppose the funds to purchase or lease the plane will come from equity holders (for ex-ample, by reducing the amount of Western's current dividend). Western also has one-year debt outstanding, and there is a 10% (risk-neutral) probability that ove..

  What is the initial investment in the product

Revenues generated by a new fad product are forecast as follows: Year Revenues 1 $52,000 2 30,000 3 20,000 4 10,000 Thereafter 0 Expenses are expected to be 50% of revenues, and working capital required in each year is expected to be 30% of revenues ..

  Return on common stock

ou buy a share of The Ludwig Corporation stock for $23.80. You expect it to pay dividends of $1.08, $1.17, and $1.2675 in Years 1, 2, and 3, respectively, and you expect to sell it at a price of $30.64 at the end of 3 years. Calculate the growth rate..

  What is the particular attraction of this type of lending

Many banks compete aggressively for business in consumer credit cards. What is the particular attraction of this type of lending?

  Describe the foreign currency and home currency approaches

Describe the foreign currency and home currency approaches to capital budgeting for a foreign project. Clearly bring out the differences between the two approaches. Which is better and why? Justify your answer.

  Calculate the earnings before taxes

A company sells 500 shirts at $15 each with a cost of goods sold of $2 per shirt. The company has selling and administrative expenses of $2500, depreciation expenses of $500, interest expenses of $1000, and a tax rate of 35%. Calculate the EBT (earni..

  How much will you pay for the policy

Curly’s Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $25,000 per year forever. If the required return on this investment is 7 percent, how much will you pay for the policy?

  What is the expense ratio for mutual fund

Avery owns a mutual fund with a NAV of $38.00 per share and expenses of $1.50 per share. What is the expense ratio for Avery's mutual fund? Jo purchased 375 shares of a no-load stock mutual fund. During the year she received $3 per share in dividend ..

  What is its cost of common equity and its WACC

Patton Paints Corporation has a target capital structure of 35% debt and 65% common equity, with no preferred stock. Its before-tax cost of debt is 8% and its marginal tax rate is 40%. The current stock price is P0 = $35.00. The last dividend was D0 ..

  Devise a strategy to compete in this environment

Much of the intense competition in the financial services industry comes from products that are the most standardized, such as mortgages, automobile loans, money market accounts, savings accounts, and so on. These products will offer very low profit ..

  What is the stocks new price per share

Rocky Ground Camping Supply Inc. has 200,000 shares of stock outstanding, each with a par value of $5 and a market value of $15. In addition, on the balance sheet there is additional paid in capital of $950,000 and retained earnings of $1,450,000. Su..

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