What is the present value of a loan that calls for payment

Assignment Help Financial Management
Reference no: EM13909307

What is the present value of a loan that calls for the payment of $500 per year for 6 years if the discount rate is 10% and the first payment will be made one year from now. how would your answer change if the 500 per year occurred for 10 years?

Reference no: EM13909307

Questions Cloud

Company a is a manufacturer with current sales : Company A is a manufacturer with current sales of $ 6,000,000 and a 60% contribution margin.
Most of us intuitively understand that a dollar required : Most of us intuitively understand that a dollar required today does not have the same value as a dollar needed (or utilized) in the future. This is due to several factors including interest rates, compounding factors, discounting factors and financia..
Newly acquired knowledge of time value of money : Give an example of how your newly acquired knowledge of Time Value of Money (TVM) calculations could better prepare you for the next negotiation or big-ticket purchase in your life.
What is the product of reaction : Questions what is the product of this reaction, the mechanism of reaction, the NMR, TLC, how many bonds does the Ni (11) complex and the streochemistry of the bond displayed.
What is the present value of a loan that calls for payment : What is the present value of a loan that calls for the payment of $500 per year for 6 years if the discount rate is 10% and the first payment will be made one year from now. how would your answer change if the 500 per year occurred for 10 years?
What is the current bond price : Great Wall Pizzeria issued 8-year bonds one year ago at a coupon rate of 6.1 percent. If the YTM on these bonds is 7.5 percent, what is the current bond price?
Which acid is present in lemon : Which acid is present in lemon ? marlic acid 2 citric acid  3 lactic acid  4tartaric acid
About the corporate valuation : Barrett Industries invests a large sum of money in R&D; as a result, it retains and reinvests all of its earnings. In other words, Barrett does not pay any dividends, and it has no plans to pay dividends in the near future. What is an estimate of Bar..
What is the volume of water that is expected to be displace : A sample of KCIO3 weighing 4.55g is strongly heated. All of the oxygen gas given off is collected over water in a flask. The atmospheric pressure is 29.06inches of mercury. The temperature is 23 degrees C. The gas constant is 0.0821 (L)(atm)(K)(mol)...

Reviews

Write a Review

Financial Management Questions & Answers

  What is the net present value and internal rate of return

What is the Net Present Value (NPV) and Internal Rate of Return (IRR) of spending $350 today on an energy efficient appliance which will save you $150 a year for the next three years assuming you could invest this money elsewhere and earn 10%?

  Interest rate risk

Both Bond Bill and Bond Ted have 7 percent coupons, make semi-annual payments, and are priced at par value. Bond Bill has 3 years to maturity, whereas Bond Ted has 20 years to maturity. If interest rates suddenly rise by 2 percent, what is the percen..

  What is amount of interest that is included in loan payment

A 10-year loan in the amount of $238,000 is to be repaid in equal annual payments. The interest rate is 7 percent, compounded annually. What is the amount of interest that is included in the loan payment for Year 3?

  Voluntary settlements for firm with outstanding debt

Voluntary settlements for a firm with outstanding debt of $125,000, classify each of the following voluntary settlements as an extension, a composition, or a combination of the two. Paying a c group of creditors in full in four periodic installments ..

  Retirement to meet your retirement goal

You believe you will spend $40,000 a year for 20 years once you retire in 40 years. If the interest rate is 6% per year, how much must you save each year until retirement to meet your retirement goal?

  What share price will you receive a margin call

You open a brokerage account and purchase 200 shares of Google at $443.05 per share.  You borrow 40% from your broker to help pay for the purchase.  The interest rate on the loan is 8%.  Assume the day after your stock purchase, Google announces abys..

  Stock of Crisp Trucking using two-factor APT model

An analyst has modeled the stock of Crisp Trucking using a two-factor APT model. The risk-free rate is 6%, the expected return on the first factor (r1) is 12%, and the expected return on the second factor (r2) is 8%. If Bi1= 0.7 and Bi2= 0.9, what is..

  Calculate the accounting break-even point

We are evaluating a project that costs $836,000. Has an eight-year life and has no salvage value. Assume that depreciation is straight line to zero over the life of the project. Sales are projected at 93,000 units per year. Price per unit is $43, a v..

  Stocks be to achieve the target required rate of return

Hazel Morrison, a mutual fund manager, has a $60 million portfolio with a beta of 1.00. The risk free rate is 3.25%, and the market risk premium is 6.00%. Hazel expects to receive an additional $40 million, which she plans to invest in additional sto..

  Contrast in flites liability under the contract to purchase

Ted was hired by In Flite, Inc. to purchase an airplane on its behalf. Without mentioning that he was making the purchase on behalf of the principal, In Flite, Ted bought a Cessna 310 from Sam. 2 weeks later, In Flite declared bankruptcy and cannot n..

  What is the after tax cash flow from the sale of this asset

Consider an asset that costs $678,300 and is depreciated straight-line to zero over its seven-year tax life. The asset is to be used in a four-year project; at the end of the project, the asset can be sold for $136,500.

  Planning to make monthly deposits

You are planning to make monthly deposits of $110 into a retirement account that pays 11 percent interest compounded monthly. If your first deposit will be made one month from now, how large will your retirement account be in 23 years?

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