What is present value of all three future benefits

Assignment Help Financial Management
Reference no: EM131532367

Del Monty will receive the following payments at the end of the next three years: $7,000, $10,000, and $12,000. Then from the end of the 4th year through the end of the 10th year, he will receive an annuity of $13,000 per year. At a discount rate of 10 percent, what is the present value of all three future benefits? Use Appendix B and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

Reference no: EM131532367

Questions Cloud

Calculate the present value of total outflows : The Bowman Corporation has a $18 million bond obligation outstanding, which it is considering refunding. Calculate the present value of total outflows.
How do banks manage liquidity risk : How do banks manage liquidity risk?
What was the total coupon payment : Then for the original total par value of 1,000,000, what was the total coupon payment on September 15, 2016?
Difference between bank return on assets-return on equity : What is the difference between a bank's return on assets (ROA) and its return on equity (ROE)?
What is present value of all three future benefits : At a discount rate of 10 percent, what is the present value of all three future benefits?
What is this company cost of equity : The return on U.S. Treasury bonds is 2.5% and the market risk premium is 6.8%. Based on this information, what is this company’s cost of equity?
Evaluating two different cookie-baking ovens : You are evaluating two different cookie-baking ovens. If your discount rate is 12 percent, what is each machine’s EAC?
Companies should always avoid debt financing : Start-up or emerging growth companies are advised to seek equity financing, not debt financing. Companies should always avoid debt financing.
Calculate the profitability index for project : Use a discount rate of 10 percent. Calculate the profitability index for project X.

Reviews

Write a Review

Financial Management Questions & Answers

  Current ratio indication of short-term liquidity

The financial manager is worried that the current ratio indication of short-term liquidity is so bad that it will be difficult to obtain additional funding.

  Sales have been if the company had operated at full capacity

Last year Godinho Corp. had $250 million of sales, and it had $75 million of fixed assets that were being operated at 80% of capacity. In millions, how large could sales have been if the company had operated at full capacity?

  Yield to maturity-compute the price of bond

The Florida Investment Fund buys 90 bonds of the Gator Corporation through a broker. The bonds pay 8 percent annual interest. The yield to maturity (market rate of interest) is 10 percent. The bonds have a 10-year maturity. Compute the price of a bon..

  Determined that its return on equity-what is profit margin

The Merriam Company has determined that its return on equity is 13.86 percent. Management is interested in the various components that went into this calculation. You are given the following information: total debt/total assets = 0.41 and total asset..

  What is the risk-free interest rate

What is the risk-free interest rate?

  Effective annual return friendly earns on lending business

What is the effective annual return Friendly’s earns on this lending business? If you were brave enough to ask, what APR would Friendly’s say you were payin

  What is price of call option with the same exercise price

A put option that expires in six months with an exercise price of $50 sells for $4.85. The stock is currently priced at $46, and the risk-free rate is 3.4 percent per year, compounded continuously. What is the price of a call option with the same exe..

  Determine the internal rate of return

If you have a financial calculator or spreadsheet, determine the internal rate of return and annualize it to determine the cost of borrowing.

  Coupon rate of new bonds be in order for issue to sell

Suppose XG is considering an expansion which it will finance through additional bond sales. Current outstanding XG bonds are selling for $1,148.77. These have a face value of $1,000, and a coupon of 8% and 10 years to maturity. If interest is paid se..

  College investment fund for his daughter

Mr. Blochirt is creating a college investment fund for his daughter.

  Find the financial break-even quantity

Consider a project with the following data: accounting break-even quantity = 5,500 units; cash break-even quantity = 5,000 units; life = eight years; fixed costs = $140,000; variable costs = $22 per unit; required return = 12 percent. Ignoring the ef..

  Using the macrs depreciation method

A company has decided to purchase new office furniture with a useful life of 12 years for $100,000. Sales tax for the furniture was $6,000, and inbound transportation costs were $4,000. The new furniture will be kept for 10 years before being sold. I..

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