What is the present value of this investment

Assignment Help Financial Management
Reference no: EM131021555

Ransport Company has made an investment in another company that will guarantee it a cash flow of $37,250 each year for the next five years. If the company uses a discount rate of 15 percent on its investments, what is the present value of this investment?

Reference no: EM131021555

Questions Cloud

What is the future worth of this investment : The punch has a first cost of $100,000 and a useful life of 15 years. At the end of its useful life, the punch has no salvage value. Annual labor costs would increase $2,000 using the gang punch, but annual raw material costs would decrease $12,00..
Directed to deposit an amount of money quarterly : Your company must make a $750,000 balloon payment on a lease 2 years and 9 months from today. You have been directed to deposit an amount of money quarterly, beginning today, to provide for the $750,000 payment. The account pays 8% per year, compound..
What does neuroscience tell us about this behavior : If people were logical and thought long term, no one would eat more doughnuts than fruit, no one would start smoking, no one would fail to save money for their retirement. So, why do so many people have bad eating habits, addictive behavior, and n..
The rewards associated with global business operations : Prepare a paper that addresses the political and business risks and the rewards associated with global business operations. Include a discussion of the impact of monetary exchange rates on corporate profits (CO 9).
What is the present value of this investment : Ransport Company has made an investment in another company that will guarantee it a cash flow of $37,250 each year for the next five years. If the company uses a discount rate of 15 percent on its investments, what is the present value of this invest..
Calculate the substitution effect for each good : Consider a simple quasi-linear utility function of the form U(x, y) = x + In y. Calculate the income effect for each good. Also calculate the income elasticity ofdemand for each good. Calculate the substitution effect for each good. Also calculate..
What is the present value of these cash flows : Nutech Corp. is expecting the following cash flows—$79,000, $112,000, $164,000, $84,000, and $242,000—over the next five years. If the company’s opportunity cost is 15 percent, what is the present value of these cash flows?
What is the most you should pay per share : The dividend for Weaver, Inc., is expected to grow at 24 percent for the next 4 years before leveling off at a 5.5 percent rate indefinitely. If the firm just paid a dividend of $1.04 and you require a return of 14 percent on the stock, what is the m..
What is the effective annual rate on this loan : You have just purchased a new warehouse. To finance the purchase, you arranged for a 30-year mortgage loan for 65 percent of the $2.5 million purchase price. The monthly payment on this loan will be $10,400. What is the effective annual rate on this ..

Reviews

Write a Review

Financial Management Questions & Answers

  Planning bond issue with an escalating coupon rate

Demand corporation is planning a bond issue with an escalating coupon rate. the annual coupon rate will be 4 percent for the first 3 years, 5 percent for the subsequent 3 years, and 6 percent for the final 3 years. if bonds of this risk are yielding ..

  What is the net profit or loss for one contract

What is the net profit or loss for one contract? What would the spot rate need to be at the time the option is exercised for the speculator to break even? What is the net profit per unit to the seller of this option if exercised now?

  Determine the yield to maturity using the valuation formula

Disney enterprises issued 7.55% senior debentures (bonds) on July 15, 1993, with a 100-year maturity (ie due on July 15, 2093). Suppose an investor purchased one of these bonds on July 15, 2003 for $1,050.

  Cause an increase in total equity

Which of the following could cause an increase in total equity?

  At what rate is the top surface of the water rising

At what rate is the top surface of the water rising when its height above the bottom of the bowl is 3 feet? 4 feet? 5 feet?

  Project is expected to generate revenues

A 5-year project is expected to generate revenues of $85,000, variable costs of $61,000, and fixed costs of $11,000. The annual depreciation is $6,200 and the tax rate is 38.7 percent. What is the annual operating cash flow?

  What is project npv in the worst-case scenario

The most likely outcomes for a particular project are estimated as follows: What is project NPV in the worst-case scenario? What is project NPV in the best-case scenario, that is, assuming all variables take on the best possible value?

  Point-of-time related values and period-related values

What is the difference between point-of-time related values and period-related values and what do they have in common? Give Practical examples for each.

  What is the expected return on the portfolio

You own a portfolio that is 38 percent invested in Stock X, 22 percent in Stock Y, and 40 percent in Stock Z. The expected returns on these three stocks are 10 percent, 15 percent, and 12 percent, respectively. What is the expected return on the port..

  Calculate the number of new customers

A local dental practice decides to run a Groupon campaign. The campaign offered $350 worth of dental services (such as teeth whitening) for $145. For the total campaign, 255 coupons were sold. Calculate the number of new customers.

  Management has recently announced that expected dividends

The firm's assets will then be liquidated and the proceeds invested in the preferred stock of other firms so that the company will be able to pay an annual dividend of $1.75 indefinitely. If your required return on investments in common stock is 10 p..

  Choosing between two bonds in which to invest their cash

Leigh Delight Candy, Inc. is choosing between two bonds in which to invest their cash. One is being offered from Hershey's and will mature in 10 years and pay. $30 each quarter. The other alternative is a Mars' bond that will mature in 20 years and p..

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