Should this investor undertake the project

Assignment Help Business Economics
Reference no: EM131165660

An investor has a project that would cost $60 million today and yield a payoff of $10 million in the end of year 1, $20 million in the end of year 2, $30 million in the end of year 3, and $30 million in the end of year 4. Should this investor undertake the project if the interest rate is 10%? Explain your answer and calculations clearly.

Reference no: EM131165660

Questions Cloud

Explain accounting standards and conceptual framework used : Explain the accounting standards and the conceptual framework used when accounting for bonds and other long-term debt instruments.
What is the maximum volume of the cuboid : For what dimensions of the plate one would obtain the maximum volume of the cuboid? What is the value of this maximum?
Determine if the packaging equipment should be purchased : Packaging equipment for Xi Cling Wrap costs $60,000 and is expected to result in end of year net savings of $23,000 per year for 3 years. The equipment will have a market value of $10,000 after 3 years. The equipment can be leased for $21,000 per yea..
What immunologic process leads to the formation of tubercles : The diagnosis of tuberculosis involves the observation of lung structures called tubercles on an X ray. What immunologic process leads to the formation of tubercles, and what type of immune cells may comprise these lesions
Should this investor undertake the project : An investor has a project that would cost $60 million today and yield a payoff of $10 million in the end of year 1, $20 million in the end of year 2, $30 million in the end of year 3, and $30 million in the end of year 4. Should this investor underta..
Marginal revenue product exceeds marginal resource cost : Ms. Smith, the owner and manager of the Clear Duplicating Service located near a major university, is contemplating keeping her shop open after 4PM and until midnight. In order to do so, she would have to hire additional workers. Ms. Smith should hir..
Why does us gaap allow a reduction in the costs : Why does US GAAP allow a reduction in the costs of a share-based award when there is a modification of terms?- Do you agree with this reasoning?
How the physical and psychological self-impact spirituality : Explain why this statement could offer spiritual inspiration to you and your colleagues. You can either use a current employment situation or a potential future job setting for this statement.
Calculate the value of loans and securities held by the bank : Abank's only liabilities are $14million in transactions deposits. The bank currently meets its reserverequirement, calculate the value of loans and securities held by the bank

Reviews

Write a Review

Business Economics Questions & Answers

  Compensating wage differentials reflect different skills

Compensating wage differentials reflect different skills of workers? Efficiency wages are equal to the marginal productivity of workers? The signaling theory of education suggests that schooling does not affect worker productivity.

  Traci consumes two goods-lemonade and pretzels

Traci consumes two goods, lemonade and pretzels. Lemonade costs $2 per glass, and she consumes it to the point where the marginal utility she receives from her last glass of lemonade is 4. Pretzels cost $3 per bag. The relationship between the margin..

  Mental health care programs

The government wants to make Medicare benefits available to more people, but to achieve this goal, it needs to make cuts in the existing Medicare budget. The two areas where they are considering cuts are non-essential elective surgery and 6-12 month ..

  Difference between the present value of the settlement

A brilliant young scientist is killed in a plane crash. It is anticipated that he could have earned $240,000 a year for the next 50 years. The attorney for the plaintiff’s estate argues that the lost income should be discounted back to the present at..

  Balance of the debt at the end of the credit period

The Peel Trading Company received an invoice dated September 20 for $16 000 less 25% and 20%, terms 5/10, 2/30, n/60. Peel made a payment on September 30 to reduce the debt to $5000 and a payment on October 20 to reduce the debt by $3000. What amount..

  Bank voluntarily purchase insurance

What price are individuals with $5,000 in the bank willing to pay for the insurance. Will those with $5,000 in the bank voluntarily purchase insurance.

  Trade barrier is reduced the chinese economy

So if trade barrier is reduced the Chinese economy will go down also affects the economy of the whole world. Do you agree or disagree with this argument.

  Consumers face with the corrective tax

The aluminum industry faces a private marginal cost curve PMC = 2Q and a market inverse-demand curve of PD = 60 – QD. However, production creates an externality with marginal damages of MD = Q. Find the market equilibrium without any government contr..

  Income from the mining of mineral deposits usually decreases

Income from the mining of mineral deposits usually decreases as the resource becomes more difficult to extract. Determine the future worth in year 10 of a mineral lease that yielded income of $14,000 in years 1 through 4 and then amounts that decreas..

  About the entrepreneurs

Entrepreneurs do all of the following except:

  Harper is spending three-day weekend at beach property

Harper is spending a three-day weekend at a beach property. Upon arrival, Harper bought a quart of ice cream and must divide consumption of the quart over each of the three days. Her instantaneous utility of ice cream consumption is given by u(c)=c^0..

  What good for wal-mart

Is Walmart Good for America? Read John Miller, “What’s Good for Wal-Mart” (article 4.4 in Real World Micro). Are lower prices at Wal-Mart necessarily good? Would it be a good or bad thing if Wal-Mart raised wages and raised prices? What would you nee..

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