Single payoff at the end of year

Assignment Help Financial Management
Reference no: EM13948572

A project has an initial outlay of $2,043. It has a single payoff at the end of year 3 of $7,083. What is the net present value (NPV) of the project if the company’s cost of capital is 8.30 percent?

Reference no: EM13948572

Questions Cloud

Find the amount of rent that end of each year to break even : David Beckham has bought a house for $250,000, of which $50,000 is the value of the land. Beckham expects that the value of the property will increase at the compound rate of 4% per year. He will rent the house for the next five years and then sell i..
Expected rate of return-bond valuation : Holiday Hiatus, a luxury vacation rental company, issued 15 year bonds to raise the capital needed to construct a five-star, all-inclusive tropical resort on the island of Bermuda.  Those bonds are selling in the open market for $1,405, a premium in ..
Normally distributed with an average historical return : Assume that annual returns on small-company stocks are normally distributed with an average historical return of 17.1% and a standard deviation of 32.6%. What is the probability that annual return on small-company stocks is positive?
Used regularly as valuation metric : P/E ratio is used regularly as a valuation metric and you will often hear it discussed in the business news media (i.e. CNBC, Bloomberg, Fox Business, etc). You have just had the opportunity to apply P/E in a relatively easy assignment. Based on this..
Single payoff at the end of year : A project has an initial outlay of $2,043. It has a single payoff at the end of year 3 of $7,083. What is the net present value (NPV) of the project if the company’s cost of capital is 8.30 percent?
Transfers from marketable securities to cash : Barenbaum Industries projects that cash outlays of $4.5 million will occur uniformly throughout the year. Barenbaum plans to meet its cash requirements by periodically selling marketable securities from its portfolio. Use the Baumol model to determin..
Using net present value when evaluating projects : Green Landscaping, Inc. is using net present value (NPV) when evaluating projects. Green Landscaping’s cost of capital is 5.76 percent. What is the NPV of a project if the initial costs are $2,478,570 and the project life is estimated as 12 years? Th..
What is the equivalent annual cost of an oven : Champion Bakers uses specialized ovens to bake its bread. One oven costs $850,000 and lasts about 3 years before it needs to be replaced. The annual operating cost per oven is $10,000. What is the equivalent annual cost of an oven if the required rat..
What are some potential pros and or cons of this decision : Interworld Distributors has paid quarterly cash dividends since 1980. The dividends have steadily increased from $.25 per share to the latest dividend declared of $2.00 per share. The board of directors is eager to continue this trend despite the fac..

Reviews

Write a Review

Financial Management Questions & Answers

  Balance sheet equity-what is target stock price in one year

Fly Away, Inc., has balance sheet equity of $6.6 million. At the same time, the income statement shows net income of $798,600. The company paid dividends of $403,293 and has 100,000 shares of stock outstanding. If the benchmark PE ratio is 30, what i..

  What is ytm and the current yield

Rolling Company bonds have a coupon rate of 5.80 percent, 23 years to maturity, and a current price of $1,176. What is the YTM? The current yield?

  Find the amount of the ordinary annuity

Find the amount (future value) of the ordinary annuity. (Round your answer to the nearest cent.) $1900/semi annual period for 7 years at 2.5%/year compounded semi annually

  How interest rates affect a forecast of foreign currencies

How would this affect a fundamental forecast of foreign currencies? How would this affect the forward rate forecast of foreign currencies?

  Determine the total ending value of the investment

An investor in the United States bought a one-year Brazilian security valued at 195,000 Brazilian reals. The U.S. dollar equivalent was 100,000. The Brazilian security earned 16% during the year, but the Brazilian real depreciated 5 cents against the..

  Calculate the after-tax cash outflow associated with each

JLB Corporation is attempting to determine whether to lease or purchase research equipment. the firm is in the 40% tax bracket, and its after tax cost of debits currently 8%. Annual end-of-year lease payment of $25,200 is required over the 3-year lif..

  What is the drop in value of share of summit system stock

Summit system has an equity cost of capital of 11%, will pay a dividend of $1.5 in one year and its dividends had been expected to grow by 6% per year. You read in the paper that summit has revised its growth prospects and now expects its dividends t..

  What is the price of consolidated stock

Consolidated Pasta is currently expected to pay annual dividends of $10 a share in perpetuity on the 2.3 million shares that are outstanding. Shareholders require a 10% rate of return from Consolidated stock. What is the price of Consolidated stock? ..

  What is the operating cash flow for the project in year two

You are evaluating a project for The Tiff-any golf club, guaranteed to correct that nasty slice. You estimate the sales price of The Tiff-any to be $450 per unit and sales volume to be 1,200 units in year 1; 1,325 units in year 2; and 1,000 units in ..

  1 suppose that there are two calls on the same stock one

1. suppose that there are two calls on the same stock one with exercise price k of 30 the other 35. the market value

  Two bond issues outstanding

Vedder, Inc., has 7.9 million shares of common stock outstanding. The current share price is $62.90, and the book value per share is $5.90. Vedder also has two bond issues outstanding. The first bond issue has a face value of $71.9 million, a coupon ..

  What is the amount of the loan

C Corp borrowed money from XYZ Bank at 11.53% interest for nine years. The loan calls for annual payments of $9,846.38 beginning today. What is the amount of the loan?

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