What is the payback period for the cash flows

Assignment Help Financial Management

Reference no: EM131881126

1. You own a stock portfolio worth 50,000 dollars. You are worried that the stock prices may take a dip before you are ready to sell so you are considering purchasing either at the money or out of the money puts. If you decide to purchase the out of the money puts your maximum loss is_____than if you buy at the money puts and your maximum gain is______.

A. greater; lower

B. greater; greater

C. lower; greater

D. lower; lower

2. Consider the following cash flows:

Year Cash Flow

0 –$ 7,400

1 2,100

2 4,700

3 1,900

4 1,600

What is the payback period for the cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Payback period years

Reference no: EM131881126

Questions Cloud

Prepare journal entries to record issuance of stock options : Prepare journal entries to record issuance of stock options, termination of the stock options, exercise of the stock options and charge to compensation expense.

Explain the characteristics of team excellence : Jim Towne heads a newly formed information technology team for a major international corporation. The team is composed of 20 professionals who live and work.

Achieve supply and demand integration : Companies encounter several types of barriers they may inhibit the firm to achieve supply and demand integration.

How did united handle its financial distress or bankruptcy : Define financial distress and discuss the major reasons United was faced with financial distress/bankruptcy?

What is the payback period for the cash flows : You own a stock portfolio worth 50,000 dollars. What is the payback period for the cash flows?

Estimate demand for the next 3 weeks : Using the Hot Pizza weekly demand figures provided, estimate demand for the next 3 weeks using a 3-week moving average as well as simple

What is the benefit for using reflective practices : What is reflective practices and What is the benefit for using reflective practices in your work? Be specific and explain - Explain how you could implement

How would you assess the effectiveness of the team : The local cancer center has a health team designed to coordinate the care of children with cancer. The team is composed of a physician.

Environmental sustainability and economic sustainability : How would you describe the trade-off between environmental sustainability and economic sustainability?

User Account

All Pages