Present value-pv of multiple cash flows

Assignment Help Finance Basics

Reference no: EM13752933

1. Present value: Tommie Harris is considering an investment that pays 6.5 percent annually. How much must he invest today such that he will have $25,000 in seven years? (Round to the nearest dollar.)

$26,625
$16,088
$23,474
$38,850

2. PV of multiple cash flows: Jack Stuart has loaned money to his brother at an interest rate of 5.75 percent. He expects to receive $625, $650, $700, and $800 at the end of the next four years as complete repayment of the loan with interest. How much did he loan out to his brother? (Round to the nearest dollar.)

$2,250
$2,404
$2,713
$2,545

3. PV of multiple cash flows: Hassan Ali has made an investment that will pay him $11,455, $16,376, and $19,812 at the end of the next three years. His investment was to fetch him a return of 14 percent. What is the present value of these cash flows? (Round to the nearest dollar.)

$41,675
$39,208
$33,124
$36,022

4. PV of multiple cash flows: Pam Gregg is expecting cash flows of $50,000, $75,000, $125,000, and $250,000 from an inheritance over the next four years. If she can earn 11 percent on any investment that she makes, what is the present value of her inheritance? (Round to the nearest dollar.)

$309,432
$412,372
$434,599
$361,998

5. Present value of an annuity: Transit Insurance Company has made an investment in another company that will guarantee it a cash flow of $37,250 each year for the next five years. If the company uses a discount rate of 15 percent on its investments, what is the present value of this investment? (Round to the nearest dollar.)

$124,868
$101,766
$251,154
$186,250

6. Future value of an annuity: Carlos Menendez is planning to invest $3,500 every year for the next six years in an investment paying 12 percent annually. What will be the amount he will have at the end of the six years? (Round to the nearest dollar.)

$28,403
$24,670
$21,000
$26,124

7. Bond price: Briar Corp is issuing a 10-year bond with a coupon rate of 7 percent. The interest rate for similar bonds is currently 9 percent. Assuming annual payments, what is the present value of the bond? (Round to the nearest dollar.)

$872
$1,066
$990
$945

8. PV of dividends: Cortez, Inc., is expecting to pay out a dividend of $2.50 next year. After that it expects its dividend to grow at 7 percent for the next four years. What is the present value of dividends over the next five-year period if the required rate of return is 10 percent?

$10.76
$11.50
$11.88
$9.80

9. PV of dividends: Givens, Inc., is a fast growing technology company that paid a $1.25 dividend last week. The company's expected growth rates over the next four years are as follows: 25 percent, 30 percent, 35 percent, and 30 percent. The company then expects to settle down to a constant-growth rate of 8 percent annually. If the required rate of return is 12 percent, what is the present value of the dividends over the fast growth phase?

$7.25
$8.37
$6.46
$1.25

Reference no: EM13752933

Questions Cloud

Evaluate alternatives to the company self-hosting the site : Evaluate alternatives to the company self-hosting the site and Build a Gantt chart using Microsoft Project or equivalent software, showing all tasks associated with implementing the Website

Expected to remain at current levels on into the future : Assume that no costs other than the call premium would be incurred to call and refund the bonds, and also assume that the yield curve is horizontal, with rates expected to remain at current levels on into the future. Under these conditions, what ..

Assets and liabilities of smith alarms : DSSI acquired all of the assets and liabilities of Smith Alarms, LLC for $555,000 cash. The assets included equipment valued at $425,000 (this equipment was carried on the books of Smith Alarms, LLC at $300,000 net), accounts receivable of $230,00..

Assess reliability of data gathered via paid internet users : Assess the reliability of data gathered via paid Internet users. Describe and assess the evaluation method being used by the testing company, i.e., nonvisual and verbal recording of browser activities and tester's vocal comments

Present value-pv of multiple cash flows : Present value: Tommie Harris is considering an investment that pays 6.5 percent annually. How much must he invest today such that he will have $25,000 in seven years? (Round to the nearest dollar.)

What are your recommendations for futre policies : Investigate current immigration policy and the major issues surrounding contemporary immigration to the United States. What are your recommendations for futre policies?

Describe how technology is changing the face of businesses : Describe how technology is changing the face of businesses today and Describe the most critical business processes that utilize information systems in your selected company

Key data about the proposed projects : Any unused portion of this budget will earn less than its 20 percent cost of capital. A summary of key data about the proposed projects follows.

Relationship between economic activities and bond prices : Is there a relationship between economic activities and bond prices? Explain using real world examples. Select any global market and discuss the make of its bond market to be compared with the U.S. bond market.

User Account

All Pages