What is the present value of this contract

Assignment Help Finance Basics
Reference no: EM131488150

Question: 1. (Present value of a complex stream) Don Draper has signed a contract that will pay him $80,000 at the end of each year for the next 6 years, plus an additional $100,000 at the end of year 6. If 8 percent is the appropriate discount rate, what is the present value of this contract?

2. (Present value of a complex stream) Don Draper has signed a contract that will pay him $80,000 at the beginning of each year for the next 6 years, plus an additional $100,000 at the end of year 6. If 8 percent is the appropriate discount rate, what is the present value of this contract?

Reference no: EM131488150

Questions Cloud

Does your classmate adequately connect the character : Did your classmate acknowledge the complexities in the character he or she chose? If so, how so? If not, what should he or she consider?
How many orders will be placed during the year : What is the economic ordering quantity? How many orders will be placed during the year? What will the average inventory be? What is the total cost of ordering?
Discuss different dividend policies : Identify a dividend payout policy that JB Hi Fi follows (a company specialized in electronics, in Australia): Please discuss different dividend policies
The topic is can sports and the media : Briefly describe the significance of this topic and your rationale for researching this particular topic.
What is the present value of this contract : (Present value of a complex stream) Don Draper has signed a contract that will pay him $80,000 at the end of each year for the next 6 years, plus an additional.
How large a cash flow benefit did the depreciation provide : How large a cash flow benefit did the depreciation provide? If the cost of capital is 10 percent, what is the net present value of selecting a new machine?
How much will the monthly payments be : (Complex stream of cash flows) Roger Sterling has decided to buy an ad agency and is going to finance the purchase with seller financing-that is, a loan from.
How much can mr gates annual withdrawal be in this case : (Future and present value using a calculator) In 2016 Bill Gates was worth about $82 billion. Let's see what Bill Gates can do with his money in the following.
How many francs will the swiss bank deliver in six months : Assume Swiss bank entered into a 180-day forward contract with Citicorp to buy $100,000. How many francs will Swiss bank deliver in six months to get US dollar.

Reviews

Write a Review

Finance Basics Questions & Answers

  You must understand how the income statement balance sheet

harvard business publishing working capital simulation managing growth assignmentacting as the ceo of a small company

  Calculate the weighted cost of the capital of this project

Assume the following facts about a firm's financing in the next year. Calculate the weighted cost of the capital of this project.

  What is the npv of a project

What is the NPV of a project that required a net investment of $500,00 and produced net cash flows of $150,000 per year for 5 years and $110,000 for the next 5 years? Assume the cost of capital is 14%.

  What is the current value of the lease

Your car dealer is willing to lease you a new car for $389 a month for 60 months. Payments are due on the first day of each month starting with the day you sign the lease contract. If your cost of money is 4.9 percent, what is the current value of..

  Compute the after tax cost of debt

What component weights should you used to compute the WACC?

  Calculate dividend declared amounts

If the firm's preferred stock is NON CUMULATIVE and the 20X8 dividend declared amounts to a total of $20,000, how much will go to PREFERRED stock holders?

  What is the value of the stock today

After that, the dividend is expected to increase in value by 3% annually/ What is the value of the stock today if the required return is 12%?

  Prepare a cash book for the governmental unit

Required: Prepare a cash book for the governmental unit.

  What is the projects pi

Bill expects aftertax cash inflows of $91,000 annually for seven years, after which he plans to scrap the equipment and retire to the beaches of Nevis. The first cash inflow occurs at the end of the first year. Assume the required return is 11 per..

  Explain the arbitrage opportunity

Security A has a beta of 1.0 and an expected return of 12%. Security B has a beta of 0.75 and an expected return of 11%. The risk-free rate is 6%. Explain the arbitrage opportunity that exists and how an investor can take advantage of it.

  What apr makes these alternatives equivalent

You have a choice between receiving $1,200,000 immediately or $101,304.76 each month for a year. What APR makes these alternatives equivalent (of equal value)?

  Which of the following statements are correct

Which of the following statements are correct? If inflation is expected to increase in the future, and if the maturity risk premium is greater than zero, then the yield curve will have an upward slope If the maturity risk premium is greater than zero..

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