Friend calls you with great investment opportunity

Assignment Help Financial Accounting
Reference no: EM133272703

Question

A friend calls you with a great investment opportunity, that will produce the following set of cash flows: $2000 per year for 6 years starting at the end of the year 2 years from now, and $5000 the year after that. Assuming you could invest in an investment of similar risk eslewhere at an annual interest rate of 8%, what is the most you should be willing to pay for this investment?

Reference no: EM133272703

Questions Cloud

Role of investments on corporation balance sheet : Role of investments on a corporation balance sheet. What considerations would you have in your business as you consider short-term and long-term investments?
Present value factor for ordinary annuity : The present value factor for an ordinary annuity at 10% for 3 periods is 2.48685, and the present value of $1 at 10% for 3 periods is 0.7513.
Planning for retirement : You are planning for retirement and have calculated that you want to have saved $1,272,000 by the time you retire in 25 years.
The cost of capital is affected by many factors : The cost of capital is affected by many factors. Which of the following factors can a firm control?
Friend calls you with great investment opportunity : A friend calls you with great investment opportunity, that will produce following set of cash flows. what is most you should be willing to pay for investment?
Calculate the taxable value of the motor vehicle : A company files its FBT returns on a quarterly basis. Calculate the taxable value of the motor vehicle for the quarter ended 31 December 2017.
Total invested funds are measured : Total invested funds are measured as: A. Debt + debt equivalents + equity + equity equivalents. B. Debt + debt equivalents - equity + equity equivalents.
Calculating revenue or expenses for organization : Prepare the explanation you would give Sidney. calculating revenue or expenses for an organization that follows IFRS.
Report for change in investment fair value : In 2018, Hammond will not report for change in the investment's fair value. Hammond will report a gain on sale of trading securities of $24,000.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Determine the cash payments made during april

During April, cash receipts totaled $233,620 and the April 30 balance was $11,070. Determine the cash payments made during April.

  Find how much was collected on account during the period

Find how much was collected on account during the period? Bravo Company had a beginning Accounts Receivable account balance of $400.

  Advise jim as to his legal position

Advise Jim as to his legal position. Does a contract exist - case law and the relevant sections of any applicable legislation.

  Find the amount of interest in the final payment

The payment equals twice the interest then due. The final payment equals 3000. Find the amount of interest in the final payment

  What the company implied enterprise value

What are the next steps in this analysis, now that you've calculated the company's implied Enterprise Value according to the DCF?

  What strategy would you employ to meet your objectives

Specifically, you would like to ensure that your investment does not fall below $50. What strategy would you employ to meet your objectives

  List and explain the relevant legislation

List and explain the relevant legislation, regulations, standards and codes of practice that may affect the preparation of financial reports?

  Is an investment bank arranging a public offering

Is An investment bank arranging a public offering of Five and Below's common stock. The par value of Five and Below's common stock is $1.

  Determining the lance? murdock rate of? return

What was Lance? Murdock's rate of? return, that? is, the value of i?? Enter a negative percentage for a loss.

  The case scenario provided will be used to answer the

the case scenario provided will be used to answer the discussion questions that follow.case scenarioms. g. a

  How should salesforce management respond

How should salesforce.com's management respond, if at all, to the criticism that its method of accounting for sales commissions distorts the company

  What is this year expected net profit

What sales price per unit will be necessary this year if management wishes to maintain the same profit to sales ratio as last year?

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