If the discount rate is infinite-what is the npv

Assignment Help Financial Management
Reference no: EM13909130

An investment has an installed cost of $535,800. The cash flows over the four-year life of the investment are projected to be $213,850, $230,450, $197,110, and $145,820.

If the discount rate is zero, what is the NPV? (Do not round intermediate calculations.)

If the discount rate is infinite, what is the NPV? (Negative amount should be indicated by a minus sign.)

At what discount rate is the NPV just equal to zero? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Reference no: EM13909130

Questions Cloud

Vienna general hospitals first obstetrical clinic : 1. What observation did ignaz semmelweis make in the obstetrical clinic that he was hired to run in vienna, austria in 1846? 2. Why did expectant mother not want to deliver their babies in vienna general hospitals first obstetrical clinic?
Manufactures do to avoid these large exchange rate squeezes : Based in Germany, and with manufacturing and assembly exclusively located in Germany, Porsche’s entire cost base is the euro or slovakian koruna (which is managed by the slovakian government to maintain stability against the euro). In the long run, w..
Aftertax salvage value : Consider an asset that costs $511,000 and is depreciated straight-line to zero over its seven-year tax life. The asset is to be used in a five-year project; at the end of the project, the asset can be sold for $168,000. If the relevant tax rate is 34..
Variable-control group-experimental groups : Some people believe that garlic prevents cancer. What would be the Hypothesis, testable prediction, experimental variable, dependent variable, control group, experimental groups, and constant factors, when designing an experiments to this belief?
If the discount rate is infinite-what is the npv : An investment has an installed cost of $535,800. The cash flows over the four-year life of the investment are projected to be $213,850, $230,450, $197,110, and $145,820. If the discount rate is infinite, what is the NPV?
Administered by applying the drug to the skin : Some drugs are administered by applying the drug to the skin (skin patch). the drug diffuses through the epidermis to the blood vessels in the dermis. what kind of substances could pass easily through the skin by diffusion/ what kind would have diffi..
Polaris offers extended service contracts : Polaris offers extended service contracts that provide repair and maintenance coverage over its products.
Comparing tactical and strategic decisions : Comparing Tactical and Strategic Decisions
How should he trade to benefit from the opportunity : Call and put options have a strike price of 20 eur and expiration date in 3 months. Both options are sold at 3 eur. The risk free interest rate is 10% per annum, the current stock price is 20eur. Identify the arbitrage opportunity for investor. How s..

Reviews

Write a Review

Financial Management Questions & Answers

  Rate of return to differ from the companys cost of capital

Two factors that cause the investor's required rate of return to differ from the company's cost of capital are_____.

  Estimate its optimal capital structure

Simon Software Co. is trying to estimate its optimal capital structure. Right now, Simon has a capital structure that consists of 20% debt and 80% equity, based on market values. (Its D/S ratio is 0.25.) The risk-free rate is 6% and the market risk p..

  Suppose the yield to maturity on the bond increases

You find a bond with 25 years until maturity that has a coupon rate of 10.0 percent and a yield to maturity of 8.5 percent. Suppose the yield to maturity on the bond increases by .25 percent. What is the new price of the bond using duration?

  Calculate the cost of fuel of conventional energy system

Calculate the cost of fuel of a conventional (non-solar) energy system for 12 years, if the total annual load is 152 GJ and the fuel price is $14/GJ, the market discount rate is 8%, and the fuel inflation rate is 5% per year.

  Whether the equations defines y as a linear function

Determine whether the equations defines y as a linear function ? In a poll conducted among 180 active investors, it was found that 100 use discount brokers 122 use full- service brokers and 54 use both discount and full time services brokers. How man..

  What is the current price of kleins common stock

The last dividend paid by Klein Company was $2.00. Klein’s growth rate is expected to be a constant 4 percent for 2 years, after which dividends are expected to grow at a rate of 6 percent forever. Klein’s required rate of return on equity (ks) is 8 ..

  What is the net present value and internal rate of return

What is the Net Present Value (NPV) and Internal Rate of Return (IRR) of spending $120,000 today on law school assuming you made $5,000 more a year more for the next 35 years assuming you could invest this money elsewhere and earn 13%?

  Value of continuously compounded nominal interest rate r

What is the value of the continuously compounded nominal interest rate r if the present value of 104 to be received after 1 year is the same as the present value of 110 to be received after 2 years?

  Southwest airlines sought to accomplish for its stakeholders

Identify what Southwest Airlines sought to accomplish for its stakeholders. Evaluate Southwest Airlines' actions with respect to employees and customers. Assess Southwest Airlines’ achievements in the area of corporate governance.

  Explain where in the consolidated financial statements

Explain where in the consolidated Financial Statements of Group X would you find evidence of a S i Non Controlling Interest (NCI) using AASB - provide the relevant paragraphs of the AASB Standards for all of the following requirements:

  What is the unlevered cost of equity for firm composed

What is the unlevered cost of equity for a firm composed of 50% debt and 50% equity, a Wacc of 14% and a cost of debt of 8%. the tax rate of 39%

  What is the firms cost of equity of the current stock price

The Giants Jersey Stores just paid its first annual dividend of $0.12 a share. The firm plans to increase the dividend by 3.5% per year indefinitely. What is the firm's cost of equity of the current stock price is $6.50 a share?

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