What is the value of the investment

Assignment Help Financial Management
Reference no: EM131837634

An investment offers $6,100 per year for 15 years, with the first payment occurring one year from now. If the required return is 6%, what is the value of the investment? What would the value be if the payments occurred for 40 years For 75 years. Forever?

Payment per year $6,100 cell(D5)

# of years 15 cell (D6)

REquired rate of return 6% cell (D7)

# of years 40 cell(D8)

# of years 75 cell (D9)

Complete the following analysis. Do not hard code values in your calculations. Your answers should be postive.

Value today with 15 years payment =

Value today with 40 years payments =

Value today with 75 years payments =

Value today of perpetuity =

Reference no: EM131837634

Questions Cloud

Prepare a report comparing two cloud hosting vendors : Find at least two cloud hosting vendors. Prepare a report comparing two cloud hosting vendors. What are the KPI's needed in the vendor
Evaluate a specific policy of our national government : Evaluate a specific policy of our national government and recommend ways to enhance what works and repair what is not working well.
Discuss how managements bargaining power might be affected : Discuss how managements or a unions bargaining power might be affected. Give an appropriate business example to illustrate what you mean
When should business be held legally responsible for safety : Is following past precedent something that seems sensible to you: always, usually, sometimes, rarely, or never?
What is the value of the investment : If the required return is 6%, what is the value of the investment. What would the value be if the payments occurred for 40 years?
Complete a summary and reflection of a current news article : Complete a summary and reflection of a current news article, one that has been published no more than 10 days prior to when the assignment is submitted.
Townspeople at various prices : a) When the price of a doughnut is 50 cents, what is the market demand for doughnuts?
What is the compounded annual rate implied : What is the compounded annual rate implied by this 20 percent rate charged for only two weeks.
Prepare financial statements in excel : Now that you have prepared the adjusting and closing entries, Smith Manufacturing, Inc. has asked that you prepare a classified Balance Sheet.

Reviews

Write a Review

Financial Management Questions & Answers

  Based on the expectations hypothesis

Based on the expectations hypothesis, would you expect the future movement of interest rates to be up or down?

  Does equivalent taylor rule become more or less aggressive

The adjustment of interest rates under inflation targeting is similar to a Taylor rule. Explain why.  - Does the equivalent Taylor rule become more or less aggressive?

  Investment project requires an initial investment

A twelve-year investment project requires an initial investment of $200,000 at inception and maintenance expenses at the beginning of each year.

  Short-term planning and long-term planning

Please provide specific examples of at least three internal and/or external conditions within a company that could be related to the theory of price. How might this affect daily operations? Short-term planning? Long-term planning?

  Requires an initial fixed asset investment

Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will have a ..

  Saving up for down payment on house

Suppose you are saving up for a down payment on a house.

  Purchasing new equipment to replace existing equipment

Urban-Gym Inc.is considering purchasing new equipment to replace existing equipment that has book value of zero and market value of $75,000 today

  Evaluate proposed acquisition of special-tax operating costs

You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck for $60,000. The truck falls into the MACRS 3-year class, and it will be sold after three years for $20,600. Use of the truck wil..

  What price should a share sell

The risk-free rate of return is 5%, the required rate of return on the market is 10%, and High-Flyer stock has a beta coefficient of 1.8. If the dividend per share expected during the coming year, D1, is $2.80 and g= 6%, at what price should a share ..

  What was the company price/earnings ratio

What was the company's price/earnings ratio?

  Plot the average tax rates against the pretax income levels

Plot the average tax rates (measured on the y axis) against the pretax income levels (measured) on the x axis).

  Well-diversified portfolio-data for asset and the market

You have developed the following data for Asset “A” and the Market. Assume that the four states of nature include all possible states: State Return on Asset A Return on the Market 1 -15 -5 2 5 0 3 20 15 4 30 20 The rate on T-Bills is 2 percent. Given..

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