Investment opportunity that involves a lease revenue

Assignment Help Financial Management

Reference no: EM131065151

You're presented with a $1MM investment opportunity that involves a lease revenue of $110,000 per year for 5 years bumping to $125,000 per year for the next 5 years. You estimate the sale price of the asset to be $1.2 MM at the end of year 10. If the opportunity cost of capital is 8%, what is the NPV of this deal? What is the IRR ?

Reference no: EM131065151

Questions Cloud

What is the 2011-2012 tuition in 2001 dollars : n-state tuition and fees at Virginia Commonwealth University (VCU) was $9517 for the 2011-12 academic year. The CPI for 2011 was 224.9 and the CPI for 2001 was 177.1. What is the 2011-2012 tuition in 2001 dollars

Find the average time that an item is on the shelf : Find the proportion of customers that go away empty handed. Find the average time that an item is on the shelf

Evaluate the effectiveness of a new television advertisement : Larkin Corporation conducted a test designed to evaluate the effectiveness of a new television advertisement for one of its household products

Motorist pay for fuel-efficient six-speed transmission : A new six-speed automatic transmission for automobiles offers an estimated 4% improvement in fuel economy compared to traditional four-speed transmissions in front-wheel drive cars. If a four-speed transmission car averages 30 miles per gallon and ga..

Investment opportunity that involves a lease revenue : You're presented with a $1MM investment opportunity that involves a lease revenue of $110,000 per year for 5 years bumping to $125,000 per year for the next 5 years. You estimate the sale price of the asset to be $1.2 MM at the end of year 10. If the..

Cost of equity using a variety of methods : The PMBA Corp (beta = 1.3) is trying to determine it cost of equity. You have been asked to give the cost of equity using a variety of methods. The methods to be used are the CAPM, and the DCF model. Calculate the three costs on equity. Explain the d..

What is the corresponding value of the distance a : If the distance a can be varied between 0 and 40 in., what is the maximum possible value of Qcr What is the corresponding value of the distance a?

Lumber liquidator has two options for short term loan : Lumber liquidator has two options for short term loan. 1. Committed line of credit with a rate of 3.1% per quarter. 2. no recourse factor who is will to buy their receivable. Lowes has an average collection period of 65 days. What is the maximum fact..

What percentage first installment forms of expected salary : As a financial advisor, your client, aged 45, is due to retire in20 years time has annual earnings of $70,000. what percentage the first installment forms of the expected final salary just before retirement, assumingthe fund earns 4.5% per annum dur..

User Account

All Pages