Opportunity cost of funds

Assignment Help Financial Management
Reference no: EM131079413

You just won the $64 million Florida lottery, which is paid annually for 20 years ($3.2 a year). The Surely Company is offering you $30 million at once in exchange for the 20 installments on your winnings. If your opportunity cost of funds is 8%, should you agree to this deal?

Reference no: EM131079413

Questions Cloud

Waterways continuing problem : Waterways prepared the balance sheet and income statement for the irrigation installation division for 2016. Now the company also needs to prepare a cash flow statement for the same division. The comparative balance sheets for Waterways Corporation’s..
Can someone personality change throughout their life : Essay Question:  Can someone's personality change throughout their life? In answering this question you must provide support for your argument, and this must include empirical research studies and/or reference to theoretical models of personality ..
Lead to an increase in wealth for the bidding : Describe four ways in which a takeover may lead to an increase in wealth for the bidding company's shareholdersCopy and paste your question here...
How the practice of nursing is expected to grow and change : Write an informal presentation (500-700 words) to educate nurses about how the practice of nursing is expected to grow and change. Include the concepts of continuity or continuum of care, accountable care organizations (ACO), medical homes, and nu..
Opportunity cost of funds : You just won the $64 million Florida lottery, which is paid annually for 20 years ($3.2 a year). The Surely Company is offering you $30 million at once in exchange for the 20 installments on your winnings. If your opportunity cost of funds is 8%, sho..
Decrease in price-holding all other things equal : Assume that all interest rates in the economy change from 7 percent to 8 percent. A 3, 4, or 10-year bond will have the least percentage increase or decrease in price, holding all other things equal.
Prepare the entry to account for the acquisition : Prepare the entry to account for the acquisition of 20 percent(1500,0000 shares) of Dono Corps capital stock. March 31, 2013 Dono Corp stock is trading at $25 a share.
How would the introduction of a new chain restaurant : Explain the difference between a change-embracing and change-fearing culture.
Result of a decision : What do we call the most desirable alternative given up as the result of a decision?

Reviews

Write a Review

Financial Management Questions & Answers

  Develop a specific set of realistic question

Develop a specific set of realistic questions (at least five per member) that you will ask each of the three executive team members based on their specific roles, responsibilities, and perspectives regarding the causes of the operating losses and the..

  Universal toddler industries stock market conditions change

As an equity analyst you are concerned with what will happen to the required return to Universal Toddler Industries stock as market conditions change. Suppose rRF=5% rM =12% and bUTI = 1.4. Under the current conditions what is rUTI, the required rate..

  How big will the balloon payment be

You have just arranged for a $1,660,000 mortgage to finance the purchase of a large tract of land. The mortgage has an APR of 6.6 percent, and it calls for monthly payments over the next 20 years. However, the loan has an eight-year balloon payment, ..

  What is the current price of the corporate bonds

Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. If the yield to maturity is 8.1 percent, what is the current price of the bond?

  According to the affordable care act and reconciliation act

According to the Affordable Care Act and Reconciliation Act, a) What are some of its implications for financial managers. b) Who will bear its costs?

  Analysis is most similar to computing the return on assets

Which one of the following methods of analysis is most similar to computing the return on assets (ROA)?

  Annualized percentage return on this investment

Suppose you buy stock at a price of $48 per share. 6 months later, you sell it for $38. You also received a dividend of $0.12 per share. What is your annualized percentage return on this investment?

  Explain what is the yield to call ytc for this bond

Call protection for the next 10 years, and a call premium of $25. What is the yield to call (YTC) for this bond if the current price is 110 percent of par value?

  Investors require a return

The Jackson–Timberlake Wardrobe Co. just paid a dividend of $9.72 per share on its stock. The dividends are expected to grow at a constant rate of 2.18 percent per year indefinitely. Investors require a return of 6.58 percent on the company's stock. ..

  Compute the value of green valley company bonds

Green Valley company bonds have a 10.66 percent coupon rate. Interest is paid semi annually. The bonds have a par value of $1000 and will mature 16 years from now. Compute the value of Green Valley company bonds if investors' required rate of return ..

  What would its future value be

What is the future value of a 7%, 5-year ordinary annuity that pays $300 each year? If this were an annuity due, what would its future value be?

  State free cash flows are expected to grow at constant rate

Estimate the fair market value of Walleye Feeders at the end of 2012. Assume that after 2015, free cash flows are expected to grow at a constant rate of 12.5% and Walleye Feeders' weighted-average cost of capital is 14 percent.

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