What is the net present value

Assignment Help Business Economics
Reference no: EM132369049

You are considering a project that will pay you $710 in the first year, $2,000 in the second year, and $1,090 in the third year. In the fourth year, the project will pay you a cash flow of 3,000, which starting from the fifth year will grow forever at a rate of 2%. If the interest rate for this project is 12%, and the time-zero cost of starting this project is $10,000, what is the Net Present Value (PV of benefits minus PV of costs) of the project? Round your answer to the first two decimal places.

Reference no: EM132369049

Questions Cloud

Objective function for the writer problem : Which of the following is the objective function for the writer's problem?
Describe enterprise-level architectural views for business : BN315 Enterprise Architecture Assignment - Strategy Map and IT, Melbourne Institute of Technology, Australia. Describe enterprise-level architectural views
What are gross earnings for a week : What are his gross earnings for a week in which he clocks 8, 9.5, 8, 8, 10, 0, and 8 hours on Saturday to Friday, respectively
What is the implicit dividend growth rate : Moreover, investors want a 6.5% return on their investment. What is the implicit dividend growth rate that investors are assigning to Alibaba's dividends?
What is the net present value : You are considering a project that will pay you $710 in the first year, $2,000 in the second year, and $1,090 in the third year.
Shares with investing directly in real estate : What are the the risks and rewards of investing in shares with investing directly in real estate?
Sharpe index and the information ratio : What is the purpose of finding the Sharpe Index and the Information Ratio? and how do they provide their insights for actual and potential investors?
How much money will be in the account at the end : How much money will be in the account at the end of that time period? Round answer to two decimal places.
Difference in the effective annual rates charged : What's the difference in the effective annual rates charged by the two banks?

Reviews

Write a Review

Business Economics Questions & Answers

  Affect the steady state level of capital and output

Discuss and illustrate graphically how a decrease in saving rate will affect the steady state level of capital and output. Also illustrate graphically the transition of capital and output from their old steady state level to new one.

  Discuss three major threats to the prosperity

Identify and discuss three major threats to the prosperity and stability of the developed countries. What, if anything, can those states do to reduce these threats, and provide specific instances when a country has undertaken the measures.

  How are prices determined under perfect competition

How are prices determined under perfect competition? Think about a firm that you have done business with recently. What industry does this firm belong to? Is it monopolistic competition, oligopoly, monopoly, or perfect competition? Justify your class..

  What is the minimum price

Assume these phones are the same type quality and there is only one price. What is the minimum price at which both countries will engage in trade?

  Annual percentage change in peso per dollar exchange rate

Based on the information above, we can expect that over the next twenty years, the average annual percentage change in the peso per dollar exchange rate will be ______.

  Manage the communication in the network

How can a VLAN help manage the communication in the network?

  Recent concerns about global warming

Recent concerns about global warming have lead firms to expect a higher depreciation of their capital in the future and households to expect lower levels of future income. Explain, with the help of a graph, what happens to a firm’s desired level of f..

  Calculate the present value for investments

Calculate the present value for Investments X and Y if the discount rate is 15 percent.

  What is the cross-price elasticity of demand

Now illustrate what is the price elasticity of demand. Illustrate what is the cross-price elasticity of demand.

  Key principles of economics

No less than 1000 words (excluding the title page, bibliography and appendices). Question 1. A Study into the Key Principles of Economics.

  Determine the maximum purchase price

The machine is expected to last 8 years and to have a salvage value of 5% of the purchase price.

  Genetic drift and the founder effect

There are two types of genetic drift. Describe and give an example of both the bottle neck effect and the founder effect.

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