What is the net present value of investment

Assignment Help Financial Management

Reference no: EM131926923

1) Solar Energy is currently examining a project that will produce cash inflows of $20,264 a year for two years followed by $13,355 in year 3. The cost of the project is $39,105. What is the profitability index if the discount rate is 9 percent?

2) Delta Mu Delta just paid its annual dividend of $7 a share. The firm recently announced that all future dividends will be increased by 4% annually. What is one share of this stock worth to you if you require a 10% rate of return?

3) Alisha can afford car payments of $264 a month for 60 months. The bank will lend her money to buy a car at 6% APR compounded monthly (0.5% per month). How much money can he afford to borrow?

4) Breakfast Hut pays a constant annual dividend of $6 per share. How much are you willing to pay for one share if you require a 10 percent rate of return?

5) You are making an initial investment of $135,082 and require a rate of return of 14 percent. You expect to receive $39,574 in the first year, $46,856 in the second year, and $50,788 in the third year. The project will be closed out at the end of the third year. What is the net present value of this investment?

Reference no: EM131926923

Questions Cloud

Explain the difference between debt and equity : Explain the difference between debt and equity in your own words. Please be as specific as possible.

What was the amount of the gift : GiGi Scholarship recently starts to fund annual scholarships for students at SCSU as a gift to the University. What was the amount of the gift?

Calculate accounting-financial break-even quantities : Calculate the accounting, cash, and financial break-even quantities.

What will your annual loan payment be : First State Bank offers you a $115,000, 6-year term loan at 5 percent annual interest. What will your annual loan payment be?

What is the net present value of investment : The project will be closed out at the end of the third year. What is the net present value of this investment?

Compounded annually and compounded quarterly : how much will he receive if the money has earned interest at the rate of 10% year compounded annually? Compounded quarterly?

True about earnings and productivity : Which of the following is true about earnings and productivity?

Company cost of capital using capital asset pricing model : Calculate the company’s cost of capital using the Gordon’s dividend growth model and the Capital Asset Pricing Model.

Management with regard to proposed equipment expenditure : what action should Jenny recommend to management with regard to the proposed equipment expenditure? Accept? Or Reject?

User Account

All Pages