1 Answer the following a) Assume you get $100 today, $110 in one year, and $121...
1 Answer the following
a) Assume you get $100 today, $110 in one year, and $121 in two years. If the interest rate is 10%, what is the present discounted value of these three payments?
i. $331; ii. $325; iii. $300; iv. $292.
b) Suppose you receive $10 at the end of each year, forever, and the interest rate is 0:10 (10%). The present discounted value is
i. $10 + $10 + $10 + $10 + ....; ii. $100; iii. $1000; iv. $500
Homework Answers
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1 Answer the following
a) Assume you get $100 today, $110 in one year, and $121...
Consider the following alternatives: i. $ 100 received in one year ii. $ 230 received in...
Consider the following alternatives: i. $ 100 received in one year ii. $ 230 received in five years iii. $ 300 received in 10 years a. Rank the alternatives from most valuable to least valuable if the interest rate is 9 % per year. b. What is your ranking if the interest rate is 1 % per year? c. What is your ranking if the interest rate is 14 % per year? a. Rank the alternatives from most valuable to...
please can you answer question 19-25 19) A bank offers a home buyer a 30-year loan...
please can you answer question 19-25
19) A bank offers a home buyer a 30-year loan at 3.5% per year. If the home buyer borrows $320,000 from the bank, how much must be repaid every year? A) $6.199 B) $10,667 C) $17,399 D) ST14,009 20) Your firm just signed a contract to receive royalty forever. The royalty is estimated to be Simil, every year, starting from next year. If the discount rate is 11%, what is the present value of...
You are going to invest $1,000 at the end of each year for five years. Given...
You are going to invest $1,000 at the end of each year for five years. Given an interest rate, you can find the future value of this investment by: 1. Adding the cash flows together and finding the future value of the sum. II. Applying the proper future value factor to each cash flow, then adding up these future values. III. Finding the present value of the sum of the payments. IV. Finding the present value of each cash flow,...
The dividend growth model: I. cannot be used to value zero-growth stocks. II. cannot be used to compute a stock pri...
The dividend growth model: I. cannot be used to value zero-growth stocks. II. cannot be used to compute a stock price at any point in time. III. requires the required return to be higher than the growth rate. IV. assumes that dividends increase by a constant amount forever. V. none of the above is correct Multiple Choice 0 II, and IV only 0 V only 0 1, I, II, and IV only 0 Ill only 0 In order to estimate...
16. You are considering a project with characteristics: shows and the tong 11.53 percent Internal rate...
16. You are considering a project with characteristics: shows and the tong 11.53 percent Internal rate of return Profitability ratio Net present value Payback period $987 2.98 years Which of the following statements is correct given this information? 1. The discount rate used in computing the net present value was less than 11.55 percent. II. The discounted payback period must be more than 2.98 years. III. The discount rate used in the computation of the profitability ratio was 11.65 percent...
You are considering a project that costs $300 and has expected cash flows of $110, $121,...
You are considering a project that costs $300 and has expected cash flows of $110, $121, and $133.10 over the next three years. If the appropriate discount rate for the project's cash flows is 10%, what is the net present value of this project?
Please show your work in deriving answers to the following questions. When answering, assume you are...
Please show your work in deriving answers to the following questions. When answering, assume you are trying to maximize the present value of benefits minus any costs that may exist. In part I. assume that all payments and receipts are at the end of the year or period, unless otherwise stated. Also, round to the nearest cent in calculating your answers. PART I (18 points) 1. Analyze the following scenarios and decide, whether you would prefer (1) or (ii) at...
The following are examples of how it must done: Exactly one year ago, Harv bought 500...
The following are examples of how it must done:
Exactly one year ago, Harv bought 500 shares of Primer Corp stock for $40.95. He plans on selling all of the shares today at the current market price of $37.75. Over the last year, Primer Corp. paid out dividends of $0.75 per share on its common stock. What is Harv's holding period return for the year on Primer Corp. stock? Submit your answer as a percentage and round to two decimal...
1. What is the value today of receiving $2,422.00 per year forever? Assume the first payment...
1. What is the value today of receiving $2,422.00 per year forever? Assume the first payment is made next year and the discount rate is 12.00%. 2. What is the value today of receiving $1,429.00 per year forever? Assume the first payment is made 6.00 years from today and the discount rate is 4.00%. 3. If you are willing to pay $42,377.00 today to receive $4,353.00 per year forever then your required rate of return must be ____%. Assume the...
1. 18 pts] For this question, suppose the market interest rate is 4 percent, and round all answers to the nearest $...
1. 18 pts] For this question, suppose the market interest rate is 4 percent, and round all answers to the nearest $1. a) What is the present discounted value of a perpetuity paying $100 per year, every year, with the first payment coming one year from today? b) What is the present discounted value of a perpetuity paying $100 per year, every year, with the first payment coming 6 years from today? c) What is the present discounted value of...
please can you answer question 19-25
19) A bank offers a home buyer a 30-year loan at 3.5% per year. If the home buyer borrows $320,000 from the bank, how much must be repaid every year? A) $6.199 B) $10,667 C) $17,399 D) ST14,009 20) Your firm just signed a contract to receive royalty forever. The royalty is estimated to be Simil, every year, starting from next year. If the discount rate is 11%, what is the present value of...
You are going to invest $1,000 at the end of each year for five years. Given an interest rate, you can find the future value of this investment by: 1. Adding the cash flows together and finding the future value of the sum. II. Applying the proper future value factor to each cash flow, then adding up these future values. III. Finding the present value of the sum of the payments. IV. Finding the present value of each cash flow,...
The dividend growth model: I. cannot be used to value zero-growth stocks. II. cannot be used to compute a stock price at any point in time. III. requires the required return to be higher than the growth rate. IV. assumes that dividends increase by a constant amount forever. V. none of the above is correct Multiple Choice 0 II, and IV only 0 V only 0 1, I, II, and IV only 0 Ill only 0 In order to estimate...
16. You are considering a project with characteristics: shows and the tong 11.53 percent Internal rate of return Profitability ratio Net present value Payback period $987 2.98 years Which of the following statements is correct given this information? 1. The discount rate used in computing the net present value was less than 11.55 percent. II. The discounted payback period must be more than 2.98 years. III. The discount rate used in the computation of the profitability ratio was 11.65 percent...
Please show your work in deriving answers to the following questions. When answering, assume you are trying to maximize the present value of benefits minus any costs that may exist. In part I. assume that all payments and receipts are at the end of the year or period, unless otherwise stated. Also, round to the nearest cent in calculating your answers. PART I (18 points) 1. Analyze the following scenarios and decide, whether you would prefer (1) or (ii) at...
The following are examples of how it must done:
Exactly one year ago, Harv bought 500 shares of Primer Corp stock for $40.95. He plans on selling all of the shares today at the current market price of $37.75. Over the last year, Primer Corp. paid out dividends of $0.75 per share on its common stock. What is Harv's holding period return for the year on Primer Corp. stock? Submit your answer as a percentage and round to two decimal...
1. 18 pts] For this question, suppose the market interest rate is 4 percent, and round all answers to the nearest $1. a) What is the present discounted value of a perpetuity paying $100 per year, every year, with the first payment coming one year from today? b) What is the present discounted value of a perpetuity paying $100 per year, every year, with the first payment coming 6 years from today? c) What is the present discounted value of...
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