Opportunity cost of capital

Assignment Help Finance Basics
Reference no: EM132525452

Explain why we refer to the opportunity cost of capital, instead of just "cost of capital" or "discount rate." While you are at it, also explain the following statement: "The opportunity cost of capital depends on the proposed use of cash, not the source of financing."

Reference no: EM132525452

Questions Cloud

What will be the value of premier if it uses no debt : Premier Health System is just about to launch operations of a new oncology center. The oncology center will have book assets of $10 million
What should be the present price of the mgc stock : The MGC Company just paid $6 dividend per share and it expects for each of the next four years a high annual growth of 60%. Thereafter it will continue
What is the contingent asset value : Assume a bank has bought a call option on bonds with a notional value of $200. Further assume that the delta of the option is calculated at 0.45 and a beta of 2
What are the free cash flows of the? project : a. What are the free cash flows of the? project? b. If the cost of capital is 15%?, what is the NPV of the? project?
Opportunity cost of capital : While you are at it, also explain the following statement: "The opportunity cost of capital depends on the proposed use of cash, not the source of financing."
Bank charges a back-end fee : If the bank charges a back-end fee of 0.5%, what is the additional revenue the bank would generate?
Find the size of quarterly payments : A company wants to accumulate 8.000 TL at the end of 5 years. It starts quarterly payments in a bank account which pays J4=9%.
Identify two different option strategies the investor : Identify two different option strategies the investor can follow to take advantage of high or increasing market volatility and explain the differences among the
Find the outstanding balance at the end of 3 years : 20.000 TL loan is being repaid by installments of 400 TL at the end of each month for as long as necessary, plus a final smaller payment. If interest is at

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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