Receive payments under the contract to the bank

Assignment Help Financial Management
Reference no: EM131814652

Shippon Co. signed a contract that will entitle them to $7,000 every six months for the next eight years. They want their money now. A bank has agreed to buy the contract with a discount rate of 4%, compounded semiannually. How much will the bank be willing to pay Shippon currently if Shippon assigns its rights to receive payments under the contract to the bank?

(Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))

Present Value $

Reference no: EM131814652

Questions Cloud

How much principal and interest will be paid : You have just taken out a $180,000, 30- year mortgage on a home. How much principal and interest will be paid in the 12th payment?
Provides aid to costa rica in response to a flood : The United States provides aid to Costa Rica in response to a flood in Costa Rica. This entry belongs to the ___________ category.
What quarterly contribution will the company : What quarterly contribution will the company need to make for the next 20 years to meet its obligation? Assume money always earns 4% annually.
What is the annual rate of return being earned : You invest $150,000 today and receive quarterly annuity payments in arrears for 10 years in the amount of $3,000. What is the annual rate of return being earned
Receive payments under the contract to the bank : How much will the bank be willing to pay Shippon currently if Shippon assigns its rights to receive payments under the contract to the bank?
What is your total return on this investment : Suppose you are a U.S. investor who is planning to invest $125,000 in Japan. What is your total return on this investment?
List the risk-return trade off in ascending order : List the risk-return trade off in ascending order of the following securities. Earning a higher return in your long-term savings
Was nicole found liable to her partnership : Nicole Moren and her sister Amy Benedetti were partners in the JAX Restaurant in Foley, Minnesota. Was Nicole found liable to her partnership?
Further development of social networking technology : Hal Carney-Trish Protura are two Web and software engineers seeking financial backing for further development of social networking technology they have created

Reviews

Write a Review

Financial Management Questions & Answers

  Book value of equity and total liabilities

The Here Today Corporation has applied to your bank for a loan. You have their financial statements and the Z-score model of: Z = 6.56*(Net Working Capital/Total Assets) + 3.26*(Accumulated Retained Earnings/Total Assets) + 1.05*(EBIT/Total Assets) +..

  What is the total intrinsic value of these options today

You sold three $35 call option contracts (each on 100 shares) at a quoted price of $1.40. What is your net profit or loss on this investment if the price of the underlying asset is $38.10 on the option expiration date? You own six call option contrac..

  What will be your annual loan payments

What will be your annual loan payments? How much of your first payment will be applied to interest and to principal repayment?

  In tax less world with no brokerage coasts

In a tax less world with no brokerage coasts, repurchases and dividends have the same effect on shareholder wealth. In the real world, however, repurchases provide more preferable tax treatment than dividends to ordinary investors. Is it necessary fo..

  What are some of the challenges implementing the framework

What are some of the challenges implementing the framework.

  Result in initial aftertax cash savings

Scanlin, Inc., is considering a project that will result in initial aftertax cash savings of $1.87 million at the end of the first year, and these savings will grow at a rate of 1 percent per year indefinitely. What is the maximum initial cost the co..

  Perform breakeven analysis

Perform a Breakeven analysis to find out at what hours of operations the two motor costs are the same.

  Coupon bond pays interest annually

A 12-year, 5% coupon bond pays interest annually. The bond has a face value of $1,000. What is the change in the price of this bond (give me a percentage change) if the market yield rises to 6% from the current yield of 4.5%?

  Increased to make extending credit slow payers worthwhile

OB 1's credit manager studied its customer and discovered that 92% were prompt payers. The records also showed that 18% of the slow payers and 3%of the prompt payers subsequently defaulted. What is the total expected number of defaults , assuming no ..

  Project will increase after tax operating cash flows

Razer Inc. is considering a project with an initial fixed asset cost of $3 million that will have zero salvage value at the end of its 10-year life. The project will increase after tax Operating Cash Flows (OCF’s) to the firm by $725,000 a year. If t..

  Definition of available to recognition of liabilities

In the governmental fund types, expenditures are generally recognized when resources are acquired. Liabilities are generally recognized if they will be liquidated with available expendable financial resources. Define “available.” Relate the definitio..

  Portfolio model maximizes expected return

A second version of the Markowitz portfolio model maximizes expected return subject to a constraint that the variance of the portfolio must be less than or equal to some specified amount. Consider the Hauck Financial Service data. Click on the datafi..

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