What is discounted payback period

Assignment Help Financial Management
Reference no: EM131312272

A project has an initial cost of $8,800 and produces cash inflows of $2,700, $5,000, and $1,600 over the next three years, respectively. What is the discounted payback period if the required rate of return is 7 percent?

Reference no: EM131312272

Questions Cloud

Determine which mutually exclusive water purification option : Blue Electronics is considering the purchase of a water filtration system to assist in circuit board manufacturing. The system costs $40,000. It has an expected life of 7 years at which time its salvage value will be $7,500. The estimated operating a..
Analysis of preventative measures : Perception of Enron Pre-2000 - Why was Enron such an admired company prior to 2000? Reason for Enron’s Failure - Why did the company fail? Analysis of Preventative Measures - Why were the company’s internal checks and balances and incentive systems u..
What is the profitability index for an investment : What is the profitability index for an investment with the following cash flows given a 9 percent required return?
Expected rate of return and holding period yield : The YTM on a bond is the interest rate you earn on your investment if interest rates don’t change. If you actually sell the bond before it matures, your realized return is known as the holding period yield (HPY). Suppose that today you buy a bond wit..
What is discounted payback period : A project has an initial cost of $8,800 and produces cash inflows of $2,700, $5,000, and $1,600 over the next three years, respectively. What is the discounted payback period if the required rate of return is 7 percent?
Income tax-the average per share price of the stocks : On June 29, 2001, Harry bought 100 shares of PG at 65. On May 29, 2002, PG issued 4 shares of SJM to Harry in a spin-off The average per share price of the stocks on that day were: PG 87.88; SJM 31.84. To the nearest dollar, What is Harry's basis in ..
Whats your portfolio return : At the beginning of the month, you owned $6,000 of News Corp, $9,000 of First Data, and $5,000 of Whirlpool. The monthly returns for News Corp, First Data, and Whirlpool were 8.80 percent, −2.67 percent, and 10.93 percent. What’s your portfolio retur..
What is npv of financing due to potential bond mispricing : You sell a bond for $11M. This bond has a 20-year maturity, a face value of $10M, a beta of 0.10, and promises an annual coupon payment of 5 percent of the face value. Assume a risk-free rate of 4 percent and a market risk premium of 6 percent. What ..
How an agency relationship is terminated : Analyze and discuss the difference between express, implied, and apparent agency relationships.Describe when an agent may be liable for tort when acting on behalf of a principal.Describe when a principal may be liable for tort when an agent is acting..

Reviews

Write a Review

Financial Management Questions & Answers

  Describe the effect on call option price

Describe the effect on a call option’s price that results from an increase in one of the following factors:

  What is the after-tax cost of debt

Avicorp has a $11.7 million debt issue outstanding, with a 5.9% coupon rate. The debt has semi-annual coupons, the next coupon is due in 6 months, and the debt matures in 5 years. It is currently priced at 93% of par value. What is Avicorp's pre-tax ..

  Repealed by the gramm-leach-bliley act

Which of the following acts was repealed by the Gramm-Leach-Bliley Act of 1999:

  Terms has the highest cost of giving up the cash discount

Which of the following terms has the highest cost of giving up the cash discount, assuming a 365-day year?

  Considering adopting the income tax

Suppose the state of California approved the use of local option income taxes (personal and corporate). You work in the finance department of a county government and the country is considering adopting the income tax.

  Yield to maturity remains constant

Chick-Fil-A bonds currently sells for $1,025. They have a 9 year maturity, and 8% annual coupon, and a par value of $1,000. Assume that the yield to maturity remains constant for the next 3 years. What is the price 3 years from today?

  What is the weighed average cost of capital

Debreu Beverages has an optimal capital structure that is 70% common equity, 20% debt, and 10% preferred stock. Debreu's pretax cost of equity is 9%. Its pretax cost of preferred equity is 7%, and its pretax cost of debt is also 5%. If the corporate ..

  Which project is better if wacc is above the interest rate

At what interest rate would the firm be indifferent between the two projects? Which project is better if the WACC is above the interest rate? Why?

  Expectations theory one-year treasury securities yield

Expectations Theory One-year Treasury securities yield 4.55%. The market anticipates that 1 year from now, 1-year Treasury securities will yield 6.6%. If the pure expectations theory is correct, what is the yield today for 2-year Treasury securities?..

  1 when you purchase a stock you expect to receive dividends

1 when you purchase a stock you expect to receive dividends plus capital gains. not all stocks pay dividends

  What are the projects modified internal rates of return

A firm is evaluating two projects. Project A requires an initial investment of $100,000 then returns $12,000 in year one, $25,000 in year two, $42,110 in year three and $50,000 in year four. What are the projects’ modified internal rates of return? I..

  Bonds for some much-needed expansion projects

Coccia Co. wants to issue new 18-year bonds for some much-needed expansion projects. The company currently has 9 percent coupon bonds on the market that sell for $1,045, make semiannual payments, and mature in 18 years.

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