Present discounted value of the net revenue flow

Assignment Help Business Economics

Reference no: EM131107455

Assume r = 0.1 is the present real interest rate and this rate is expected to prevail for the next 2 years. The monetary return (i.e. marginal revenue product) on machine A is expected to be R1 = $100,000 for year 1 and R2 = $50,000 for year 2. The present discounted value (PDV) of the net revenue flow from machine A to its owner is equal to _________. (NOTE: Write your answer in number format, with 2 decimal places of precision level; do not write your answer as a fraction. Add a leading zero and trailing zeros when needed. Use a period for the decimal separator and a comma to separate groups of thousands.) Show all steps.

Reference no: EM131107455

Questions Cloud

Low energy prices create deflation : “Low energy prices create deflation, which can drive the real interest rates up.” Use the equation connecting the real and the nominal interest rate to the rate of inflation to justify this statement.

Application of value at risk : Application of Value at Risk (VaR) In this project, you are estimating the 1 month VaR for a portfolio of two currencies. The weight of British pound in the portfolio is 70%, and the weight for Euro is 30%. The market approach is used to forecast the..

How to select the proper jurisdiction of court : Create a brief scenario and walk it through the litigation process, beginning with how to select the proper jurisdiction of a court, and progressing through the basic steps leading to a resolution of the dispute through appeal.

The rulemaking process to promulgate legislation : Choose an administrative agency you have learned about or encountered in the business world. Using this agency, create a scenario and walk the agency through the rulemaking process to promulgate legislation that pertains to your business sector of in..

Present discounted value of the net revenue flow : Assume r = 0.1 is the present real interest rate and this rate is expected to prevail for the next 2 years. The monetary return (i.e. marginal revenue product) on machine A is expected to be R1 = $100,000 for year 1 and R2 = $50,000 for year 2. The p..

What is the annual effective interest rate earned on bond : A bond was purchased for $1000. Quarterly interest payments of 3.50 have been received. After 18 months the bond was sold for $1243.51. What is the annual effective interest rate earned on this bond?

Common law has always allowed all adults executing : The common law has always allowed all adults executing a will to partially or completely disinherit all, some or none of their children, adult or minor, as they see fit. No reason must be given and absolute discretion falls to each individual parent ..

Frequently gets mixed up when explaining macroeconomics : Sandra is an inexperienced teaching assistant who frequently gets mixed up when explaining macroeconomics. When trying to deliver the following statement, Sandra draws a blank.

Assumption of the economic order quantity model : Which one of the following is NOT an assumption of the Economic Order Quantity (EOQ) model?

User Account

All Pages