Future value if you compound less frequently

Assignment Help Financial Management
Reference no: EM13882245

When you compound an initial lump sum annually instead of monthly at the same nominal interest rate over the same three year period, what will happen to the future value? Same question in other words: what happens to the future value if you compound less frequently?

Reference no: EM13882245

Questions Cloud

Dividends on common stock : Dividends on common stock are which one of the following?
Whats the market risk premium : A stock has a beta of 1.2. The risk free rate is 5.1% and market return is 13.6%. What’s the market risk premium? What's the expected return of the stock under CAPM?
Will you use direct or indirect distribution : Discuss the company activities that will make your product or service available to your target consumer. Will you be using intensive, selective, exclusive distribution? Will you use direct or indirect distribution
Stock price for abbott based on residual income model : Abbott Lab made $2.80 net income per share last year and paid out $1.30 in dividend. The company had a book value (or equity) per share of $20.   The market has a risk free rate of 3.1% and market return 11.1%. What’s the discount rate using CAPM? Ca..
Future value if you compound less frequently : When you compound an initial lump sum annually instead of monthly at the same nominal interest rate over the same three year period, what will happen to the future value? Same question in other words: what happens to the future value if you compound ..
Depreciated straight-line to zero over three-year tax life : Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.97 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be w..
Should all businesses venture into e-commerce : Should all businesses venture into e-commerce, or is it better for only certain types of businesses?
Debt-assets ratio-sales and costs remained constant : Last year Rennie Industries had sales of $305,000, assets of $175,000, a profit margin of 5.3%, and an equity multiplier of 1.2. The CFO believes that the company could reduce its assets by $51,000 without affecting either sales or costs. Had it redu..
Explain the ethical issues faced by the organization : Explain the ethical issues faced by the organization, summarize the legal and regulatory issues faced by the organization, and then summarize the organization's corporate social responsibility

Reviews

Write a Review

Financial Management Questions & Answers

  Company pledges to increase its dividend

Mickelson Corporation will pay a dividend of $2.74 per share next year. The company pledges to increase its dividend by 6 percent per year indefinitely. If you require a return of 12 percent on your investment, how much will you pay for the company’s..

  Calculate present value of cash inflow

Whats the firm's cash conversion cycle and assume that all of the firm's sales are on credit. If the firm has annual sales of $4 million, what's the accounts receivable investment

  Which is expected to grow at a constant rate

B&B currently has free cash flow of $24  million, which is expected to grow at a constant rate of 5%. B&B's financial statements  report marketable securities of $100 million, debt of $200 million, and preferred stock of  $50 million. B&B's WACC is 1..

  What will be the current market price of the firms bonds

Pullman Corp issued 10-year bonds four years ago with a coupon rate of 9.16 percent. At the time of issue, the bonds sold at par. Today bonds of similar risk and maturity must pay an annual coupon of 5.60 percent to sell at par value. Assuming semi a..

  What is the net present value of the factory

A factory costs $860,000. You reckon that it will produce an inflow after operating costs of $176,000 a year or 10 years. If the opportunity cost of capital is 12%, what is the net present value of the factory? What will the factory be worth after ni..

  Calculating its earnings available to common stockholders

Travels Sailing, Inc. sells sailing trips at the seashore. Travels has asked for help in calculating its earnings available to common stockholders. The firm generated revenues of $35,000 from its products. The operating costs to produce the products ..

  Indicative of a restrictive short-term financial policy

Which one of the following actions is indicative of a restrictive short-term financial policy?

  Exchange rate value of the euro

If the exchange rate value of the euro goes from U.S. $1.15 to U.S. $1.05, then:

  A project has a net present value of zero

A project has a net present value of zero. Which one of the following best describes this project?

  Cash flows-what is the net rate of return

A U.S. investor buys 100 shares of Heineken listed in Amsterdam for 40 Euros. She goes through a U.S. broker, and the current exchange rate is 1 euro = 1.1 U.S. dollars. Her total cost is $4,400, or $44 per share of Heineken (40 × 1.1 $ per €).

  Explain crocket''s estimate has considered some things

The new machine, according to the brochure sent over by the saleswoman, has a manufacturer's suggested retail price of $275,000, including installation and transportation

  What annual interest rate-future with quarterly compouding

What annual interest rate do you need for an investment to be worth $10,207.73 seven years in the future with quarterly compouding if you deposit $6,500 today?

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