User Account

All Pages

Npv formula to get the npv of the loan

Assignment Help Finance Basics
Reference no: EM131101102

Sachin has asked his flat mate Jason for a $450 loan to cover a portion of his rent and utility costs. Sachin proposes repaying the loan with $375 from each of his next two financial aid disbursements, the first 4 months from now and the second 13 months from now. Jason's alternative is to earn 5% annually in his money market account. Assume there is no risk of default, and that compounding is monthly. What is the NPV of the loan from Jason's perspective? (Enter just the number in dollars without the $ sign or a comma and round off decimals.)HINT It's a  NPV problem. Draw the timeline on an Excel sheet with cashflows. You have your initial investment and the all the cashflows thereafter, he receives 375 dollars at the 4 month and 13 month. Use the NPV formula to get the NPV of the loan.

Reference no: EM131101102

Questions Cloud

Which hopes to rival holiday inn on the national scene : A summary of the balance sheet of Travelers Inn Inc. (TII), a company which was formed by merging a number of regional motel chains and which hopes to rival Holiday Inn on the national scene, is shown in the table: Travelers Inn: December 31, 2004 (M..
Reprinted by the permission of russell & volkening : I Know Why the Caged Bird Sings by Angelou, Maya. Copyright 1969 by Nelson Thornes Ltd. Reprinted by permission of Nelson Thornes Ltd. via the Copyright Clearance Center.
Which is most true regarding performance appraisals : She received more negative evaluations over a period of three years after a new supervisor was hired, though the more stringent requirements that were applied to her were not applied to white employees. After 3 years, the employee was then select..
What is the projects irr : Jella cosmetics is considering a project that costs $750,000 and is expected to last for 9 years and produce future cash flows of $180,000 per year. If the appropriate discount rate for this project is 17 percent, what is the projects IRR?
Npv formula to get the npv of the loan : You have your initial investment and the all the cashflows thereafter, he receives 375 dollars at the 4 month and 13 month. Use the NPV formula to get the NPV of the loan.
On what scale is the speed of each car measured : On what scale is the speed of each car measured?
Pure residual dividend policy : If the company follows a pure residual dividend policy, how large a dividend will each shareholder receive this year? If the company maintains a constant dividend payout ratio each year, how large a dividend will each shareholder receive this year?
What a great definition of cryptography : Timothy, what a great definition, cryptography is the science of decoding information with a key and like Timothy stated, these keys are both "public (lock) and private (unlock)."
Amazon company using ratio analysis : Analyze the strengths and weaknesses of the Amazon company using ratio analysis, and present your findings in a paper of 1,500-2,000 words.

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the payback period for the investment

a. what is the payback period for the investment? would it be a good or a bad investment? why? b. what is the ROI for the investment c. Assuming a 15% discount rate, what is the investment NPV?

  A firm expects to have available 500000 of earnings in the

a firm expects to have available 500000 of earnings in the coming year which it will retain for reinvestment purposes.

  Calculation of initial outlay for capital investment

1. Which of the following cash flows are NOT considered in the calculation of the initial outlay for a capital investment proposal?

  An analyst has modeled the stock of crisp trucking using a

an analyst has modeled the stock of crisp trucking using a two-factor apt model. the risk-free rate is 6 the expected

  In addition you are told that the firm issued 2600 in new

sheffield co. shows the following information on its 2010 income statement sales 153000 costs 81900 other expenses

  Trevor price bought 10-year bonds issued by harvest foods

trevor price bought 10-year bonds issued by harvest foods five years ago for 985.69. the bonds make semiannual coupon

  What is the exercise price of the conversion feature

An investor come to you and states that she has the option of converting her $2000 XYZ Corporate Bond into 20.50 shares of XYZ common stock. If the XYZ Bond pays a coupon rate of 5.25%, has a call price of 105, and matures in 7 years, what is the ..

  Determine what will happend to the exchange rate

if japan has low inflation and mexico has high inflation, what will happend to the exchange rate between the Japanese Yen and Mexican Peso.

  What was the dollar value of the underpricing associated

On August 19, 2004 Google issued its IPO of 18.7 million shares to the initial investors at $82.42 per share. The closing price of the stock that same day was $98.08. What was the dollar value of the underpricing associated with the Google IPO?

  Turner corp has debt of 230 million and generated a net

turner corp. has debt of 230 million and generated a net income of 121 million in the last fiscal year. in attempting

  Question 1 suppose you are asked to conduct a study to

question 1 suppose you are asked to conduct a study to determine whether smaller classes lead to improved student

  Find the probability that the machine will be profitable

Find the probability that the machine will be profitable (that is its NPV > 0). Should the hospital buy the machine?

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd