User Account

All Pages

What is the npv of the loan from her parents perspective

Assignment Help Macroeconomics
Reference no: EM132482904

Becky needs another $1,100 in her vehicle fund to purchase the car she wants. Her parents offer to loan her the money, but want to teach her about the time value of money. They offer to have her repay the loan in the future using money from freelance work. They agree that she will repay $475 at each of her next three booked engagements. These events are 3, 9 and 16 months from now. Assume a 5% cost of capital. Assume there is no risk of default, and that compounding is monthly. What is the NPV of the loan from her parents' perspective?

Reference no: EM132482904

Questions Cloud

Determine the free cash flow of soap : Determine the free cash flow (FCFF) of Soap Ltd for years 1 & 2.
Determine the amount to be paid in full settlement : Determine the amount to be paid in full settlement of each of two invoices (a) and (b), assuming that credit for returns and allowances
Determining the operating income-rao construction : Rao Construction recently reported $20.50 million of sales, $12.60 million of operating costs other than depreciation, and $3.00 million of depreciation
Determining the payback period in years : In other words, what is the DISCOUNTED payback period in years? Discount future cash flows before calculating payback rounded UP to a whole year
What is the npv of the loan from her parents perspective : Assume a 5% cost of capital. Assume there is no risk of default, and that compounding is monthly. What is the NPV of the loan from her parents' perspective?
Discuss the implications of accepting moral theory : Explain how utility is calculated and apply this to the case, for Kantianism, you must apply the categorical imperatives - Make sure you present the theory
Compute which of the two statements is correct : Compute Which of the two statements is correct? The one-year interest rates for the USD and EUR are: rUSD = 1% and rEUR = 5%.
Prepare the journal entry for Arness to record the sale : Arness estimates the fair value of the recourse liability to be $8,000. Prepare the journal entry for Arness to record the sale
Probability that the average time : Suppose 5 returns are selected at random. What is the probability that the average time taken to audit these 5 returns will be at least 24 minutes?

Reviews

Write a Review

Macroeconomics Questions & Answers

  Inflation targeting be a good policy

Why might it be difficult for the Fed to formally adopt inflation targeting?  Would inflation targeting be a good policy for the Fed in the present economic environment

  In using the taylor rule

In using the Taylor Rule as a guideline for monetary policy, what are the pros and cons of using forecasted values of inflation and output rather than observed values of these variables?

  Describe the present economic crisis situation in europe

Describe the present economic crisis situation in Europe.  Why has it been so difficult for the Europeans to find a solution to this problem?   Comment on what implications the crisis may have for the rest of the world if Europeans are not able to ag..

  Long-term federal government budget problems

Question:. Explain why there are long-term Federal government budget problems. Explain why the base-line forecast of the CBO is misleading.

  Derive and compare demand curve

Question based on Derive and compare demand curve,  Derive Ambrose's demand function for peanuts. How does it compare with Johnny's demand curve for peanuts?

  Problem based on utility function

Problem based on  Utility Function - Problem,  Answer and explain the following using a diagram which is completely labeled.

  Laffer curve : tax rate and tax revenue

Question based on Laffer Curve : Tax Rate and Tax Revenue,  Do raising tax rates necessarily raise tax revenue? What factors affect how tax revenue changes when tax rates change?

  Problem - income elasticity of demand

Problem - Income Elasticity of Demand,  Interpret the following Income Elasticities of Demand (YED) values for the following and state if the good is normal or inferior; YED= +0.5 and YED= -2.5

  Positive balance of payment

Question Positive Balance of Payment: "Things will look good for the US if we could just get to where we are consistently running a positive Balance of Payments."

  Effect of recession on the investment curve

Comment on the effect of a recession on the investment curve (only) and on the level of savings, investment, and the equilibrium real interest rate in the financial crisis that hits United States first starting in fall 2007.

  Affect of falling domestic investment on trade surplus and

How will a fall in domestic investment affect the trade surplus and net capital outflows in the domestic economy, the trade deficit and capital inflows in the rest of the world.

  Crises in the banking sector and bank run

Banking crises crisis decreases depositors' confidence in the banking system. What would be the effect of a rumor about a banking crisis on checkable deposits in such a country?

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd