Relationship between future value and present value

Assignment Help Finance Basics
Reference no: EM132670177

Relationship between future value and present value: Mixed stream

Using the information in the accompanying table, answer the following questions that follow. Year (t) Cash Flow 1 $ 800 2 900 3 1000 4 1500 5 2000

A. Determine the present value of the mixed stream if cash flows using a 5% discount rate.

B. How much would you be willing to pay for an opportunity to buy this stream, assuming that you can at best earn 5% on your investments?

C. What effect, if any, would a 7% rather than a 5% opportunity cost have on your analysis? Explain.

Reference no: EM132670177

Questions Cloud

Calculate the labor-force participation rate : Calculate the working-age population as a percentage of the population.
When should fox report a gain on income statement : Fox expects to hold these bonds for about 18 months. When should Fox report a gain on its income statement for these bonds?
What is the size of the? loan : The rate of interest on the loan is j12=12%. The principal repaid in the 25th payment is? $206.41. What is the size of the? loan?
Outline the qualitative guidelines of materiality : How the constructs of "materiality" influence the auditors' professional judgment on misstatements? Outline the qualitative guidelines of materiality
Relationship between future value and present value : Using the information in the accompanying table, answer the following questions that follow. Year (t) Cash Flow 1 $ 800 2 900 3 1000 4 1500 5 2000
What is the 90-day forward rate : What is the 90-day forward rate? Do not round intermediate calculations. Round your answer to four decimal places.
How much will all the preferred shareholders receive : If Fox declares cash dividends of $200,000 during the current year and there are no dividends in arrears, how much will all the preferred shareholders receive?
What is the gain included in owl current year : Owl Co. retired its $2,500,000 par value, What is the gain or (loss) included in Owl's current year income statement for the early retirement of these bonds?
Review case study of soap segment in indian fmcg market : Across the globe, the significance of sales promotion in the marketing mix of the Fast Moving consumer Goods (FMCG)' industry has been increasing day-by-day.

Reviews

Write a Review

Finance Basics Questions & Answers

  Calculate maria’s total probate estate as it exists now

Calculate Maria's total probate estate as it exists now.

  What value do you believe xbrl will have in a large company

What value do you believe XBRL will have in a large company? What value do you believe XBRL will have in a small company?

  Explaining the lower-of-costor-market rule

Accounting principles for inventory and applying the lower-of-costor-market rule Some of L and M Electronics's merchandise is gathering dust.

  A 1000 bond consists of a coupon rate of 10 percent and

a 1000 bond has a coupon rate of 10 percent and matures after eight years. interest rates are currently 7 percent. what

  Find total value of investment in dryden stock

Dryden, Corp. has 500,000 shares of common stock outstanding, a P/E ratio of 11, and $900,000 earnings available for common stockholders.

  Explain financial statement and operating indicator analysis

What is the key difference between financial statement analysis and operating indicator analysis? How are these types of analyses useful to healthcare managers?

  What is the reputation risk

What is the reputation risk? is the reputation risk which is the greatest risk facing business today?

  How debt capacity of the governmental entity is determined

Explain how the debt capacity of the governmental entity is determined. Evaluate the effect of refunding or reorganizing existing debt obligations. Analyze various funding alternatives that can be used to support debt obligations.

  Execute a bond market-neutral trading strategy

Execute a bond market-neutral trading strategy.

  Loan in six equal annual payments at an interest rate

If you borrow $2,000 and agree to repay the loan in six equal annual payments at an interest rate of 11%, what will your payment be?

  How sensitive is ocf to an increase of one unit

straight line depreciation to zero over the 3 year life; zero salvage value; price =$34.99; variable costs=$23.16; fixed costs=$245,000; quantity sold=94,500 units; tax rate=35%. How sensitive is OCF to an increase of one unit in the quantity sold..

  How many credits toward social security

• As part of your planning, how can you estimate what you can expect from Social Security as a contribution to your retirement income? Find this answer by going to http://www.ssa.gov/retire2. Using the menus at this site, find out your retirement ..

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