What is the present value of stream of cash flows

Assignment Help Finance Basics
Reference no: EM132370463

Consider an investment that pays $200 one year from now, with cash flows increasing by $200 per year through year four. If the interest rate is 12 percent, what is the present value of this stream of cash flows? If the issuer offers this investment for $1,500, should you purchase it?

Reference no: EM132370463

Questions Cloud

What communication researcher and theorists are trying to do : Which metaphor for theory - lens, net, or map - do you find most convincing in explaining what communication researchers and theorists are trying to do?
Post description of the importance of the use of theory : As a social work student, it is important to understand the need for theory-informed practice. As you assess, intervene, and evaluate in your practice.
What is the credit card ear : A credit card offers an APR of 22%. If the actual interest is compounded monthly, what is the credit card's EAR?
Discuss health promotion-disease prevention : Investigate programs globally that are attempting to address health promotion/disease prevention in areas with high poverty. Make a graphic with a minimum.
What is the present value of stream of cash flows : If the interest rate is 12 percent, what is the present value of this stream of cash flows? If the issuer offers this investment for $1,500, should you purchase
Find the monthly payment under plan i : a) Find the monthly payment under Plan I. b) Find the monthly payment under Plan II. c) Which plan should you choose? Show you reasoning.
What ethical theory best applies to your experience : You began this session considering a moral-ethical dilemma you yourself faced that you either resolved or failed to resolve, but hopefully learned from.
What will the dividend be in five years : Suppose a stock currently pays a dividend of $1.10, which is expected to grow at 40 percent per year for the next five years. What will the dividend be in five
Insert the plan records and screening records into database : CP5503 Enterprise Database Systems Oracle Assignment - Trigger, James Cook University, Australia. Insert the plan records and screening records into database

Reviews

Write a Review

Finance Basics Questions & Answers

  Annual dividend in perpetuity

US Bank just issued some new preferred stock. The issue will pay a $6 annual dividend in perpetuity, beginning 10 years from now.

  Briefly describe the four major types of pressure grouting

Briefly explain the process of vibratory compaction as used in soil improvement.

  Targeted weighted average cost of capital

Central Systems, Inc. desires a weighted average cost of capital of 7 percent. The firm has an after-tax cost of debt of 5 percent and a cost of equity of 10 percent. What debt-equity ratio is needed for the firm to achieve its targeted weighted a..

  Evaluate financial situation

1) A Manufacturing Company has hired an economist to evaluate its financial situation. She explains to the board of directors that the company is making zero economic profit. Should the company go out of business?

  Calculate the after tax cost of debt for the wallace clinic

Calculate the after tax cost of debt for the Wallace Clinic, a for profit healthcare provider, assuming that the coupon rate set on its debt is 1.1 percent and its tax rate is a. 0 percent, b. 20 percent c. 40 percent.

  Computing dol, dfl, and dtl

A Company with sales in 2003 of $ 102,123,000 closed out 2004 with sales of $ 112,250,000 and net operating incomes (EBIT) of $ 25,530,000 and $ 28,758,000 respectively.

  Determine the firm''s annual lost cash discounts

Assuming that Eaton is able to raise the $250,000 it needs by stretching its accounts payable, determine the following: a. The firm's annual lost cash discounts b. Annual penalties c. The annual financing cost of this source of financing

  Stock r has a beta of 20 stock s has a beta of 050 the

stock r has a beta of 2.0 stock s has a beta of 0.50 the expected rate of return on an average stock is 11 and the

  Other comprehensive income

Which of the following would be considered an "Other Comprehensive Income" item?

  Explain what would happen if the smoothing constant in an

explain what would happen if the smoothing constant in an exponential smoothing model was equal to zero. explain what

  What is the approximate percentage change

What is the approximate percentage change in the portfolio value if the one-year yield changes to 2.17%, the two-year yield to 3.3%

  Coverage for damage to your auto

Coverage for Damage to Your Auto (Part D) in the PAP also covers the insured while driving a nonowned auto.a. Define the meaning of a nonowned auto.

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