What discount rate to use

Assignment Help Finance Basics
Reference no: EM133003724

When it comes to time value of money, a key choice is what discount rate to use.

We are primarily interested in what discount rate a company should use when evaluating an investment. But, government must also use a discount rate when evaluating investments such as infrastructure projects.

While there is theory to guide what the rate should be, arguably the choice tends to be more arbitrary.

When evaluating long-term infrastructure projects do you think it better for government to err more towards using a higher or lower discount rate. Why?

Reference no: EM133003724

Questions Cloud

How much will annual payments have to be in order to reach : You figure you will need to have saved up at least $15,000 at that point. How much will your annual payments have to be in order to reach your goal amount?
Calculate the price of the callable bond : GoGoMUCity Inc. plans to issue a perpetual callable bond that pays 10.29% annual coupons. The current interest rate is 8.1%. Two years later, there is 17% proba
Value of a segregated fund contract at death : Who can make a claim for the value of a segregated fund contract at death?
How much will have in account after ten years : Say you deposit $100 into an account today. The bank promises you 6% interest compounded monthly. How much will you have in your account after 10 years?
What discount rate to use : When it comes to time value of money, a key choice is what discount rate to use.
What is the stream of cash flows worth to today : You are promised $100 at the end of year 1, $200. What is this stream of cash flows worth to you today if the discount rate is 7%?
How large a check must you have : Assume that you purchased an outstanding Lex bond on March 1, 2023, when the going rate of interest was 15.5 percent. How large a check must you have
MAN134 International Management Assignment : MAN134 International Management Assignment Help and Solution, Solent University - Assessment Writing Service
What is the future value of the cash flow payments : a) An individual makes rental payments of $1,200 per month and wants to know the present value of their annual rentals over a 12-month period. The payments are

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the fair value of a share

A company will deliver Enterprise Free Cash Flows of 100M at the end of the current year, 120M at the end of the next year

  Calculate accumulated depreciation over given time

Genetic Insights Co. purchases an asset for $19,234. This asset qualifies as a seven-year recovery asset under MACRS. The seven-year fixed depreciation.

  What are we attempting to measure

For the following problem, put answers a - d in the box divided by commas. Also, the only answer that requires a calculation is d.

  Your assignment is to value two call options using two

your assignment is to value two call options using two different option-pricing calculators and or pricing

  What is the net present value of the project

Aerospace Dynamics will invest $135,000 in a project that will produce the following cash flows. The cost of capital is 11 percent.

  Obtain the level of the first few payments

If repayment is scheduled at the end of every fifth day, obtain the level of the first few payments, assuming he will pay $ 42,127 at the end of the term.

  Expatriate Pay Assignment

Expatriate Pay Assignment help and solutions:- How do compensation plans affect employees' willingness to accept foreign assignments?

  What is direct and indirect finance

What is direct and indirect finance? Explain in detail by giving a practical example of a bank and other direct financing

  What is the current price of the bond

What is the current price of the bond? Explain whether the bond will sell at a discount or a premium?

  Effect of leverage with floating rate debt

Consider the case of (riskless from a default perspective) variable or floating rate debt. Show that the volatility of the equity return to a property.

  What will be the annual rate of return on the bond

What will be the annual rate of return on the bond? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places).

  Relationship between the hamstring strength index

Describe the direction of the relationship between the Hamstring strength index 60/s and the Shuttle run test.

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