What is the present value of perpetuity

Assignment Help Financial Management
Reference no: EM132007357

1. What is the present value of a perpetuity of $5,148 per year given an interest rate of 7.1%, assuming that the first cash flow occurs today?

2. What is the future value exactly 27 years from today of a deposit of $1,262 made today into an account that pays interest of 17% p.a.?

3. If the price of a loaf of bread has tripled over the past 19 years, what has been the annual rate of inflation in the price of bread over that time period?

Reference no: EM132007357

Questions Cloud

Accepting policies that are dictated by their competitors : To what extent can firms set their own credit policies as opposed to accepting policies that are dictated by their competitors?
What is the present value of the bond : Suppose a bond with a face value of $1000 is discounted to the present at 10%, what is the present value of the bond in 30 years if market rate is 5 %?
Stock to the systematic and firm-specific components : Break down the variance of each stock to the systematic and firm-specific components.
Government hates the annual budgeting cycle : It seems that everyone in corporate and government hates the annual budgeting cycle.
What is the present value of perpetuity : What is the present value of a perpetuity of $5,148 per year given an interest rate of 7.1%, assuming that the first cash flow occurs today?
Expense on the company consolidated cash flow : What is the net effect of this expense on the company’s consolidated cash flow?
Calculate the present value of annuity cash flow : Calculate the present value of annuity cash flow of 1100 with the first cash flow received in one year assuming a discount rate of 9.2 percent.
Gains-losses on call option position and futures position : Calculate Apex’s gains and losses on the call option position and the futures position assuming that the future spot rate will be at.
Bank offers three-year certificates of deposit : Your bank offers 3-year certificates of deposit with a stated rate of interest of 16.15% p.a., compounded quarterly.

Reviews

Write a Review

Financial Management Questions & Answers

  Find the irr for the company project

Deep Waters, Inc. is using the internal rate of return (IRR) when evaluating projects. Find the IRR for the company’s project.

  Including both employee and employer contributions

what is the total contribution to the account in 2016 including both employee and employer contributions?

  What is the yield to maturity on the bond issue

Your boss has indicated that he would like your help in determining the value of a bond issue currently under review. The firm has bonds outstanding that have four (04) years remaining to maturity, a coupon interest rate of 10 percent paid annually, ..

  What is the value of the owners equity

Kylie Jenner's Company has net working capital of $29,800, net fixed assets of $64,800, current liabilities of $34,700, and long-term debt of $23,000.

  Although bill has nothing saved for retirement

Although Bill has nothing saved for retirement so far, he has determined that he will need to have $856,000 in the account when he retires.

  What was wallaces total long term debt in 2013

What was Wallace's total long-term debt in 2013? Round your answer to the nearest dollar.- What were Wallace's total liabilities in 2013? Round your answer to the nearest dollar.

  What is required rate of return

If the current value of the firm's shares based upon the constant growth model is $32.03, what is the required rate of return?

  What level of sales should she be willing to abandon project

At what level of sales should she be willing to abandon the project?

  What is the variance of the returns on rtf inc. stock

The probability of a boom is 63 percent while the probability of a recession is 37 percent. What is the variance of the returns on RTF, Inc. stock?

  Market definition as part of project plan for acquiring firm

Write a detailed Industry/Market Definition as part of a project plan for the acquiring firm

  Difference in interest rates in corporate and treasury bonds

Assume that r* = 1.0%; the maturity risk premium is found as MRP = 0.1%(t - 1) where t = years to maturity; the default risk premium for Corporate bonds is found as DRP = 0.06% (t - 1); the liquidity premium is 0.80% for corporate bonds; and inflatio..

  Everyone has piled into the junk bond market

According to the article in the New York Times, in 2012, “everyone has piled into” “the junk bond market. The article also observed,

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