Your business is expected to generate an $88,888 profit at the end of year 1, and profit will increase by 8% per year through year 8. If the annual interest is 8%, what is the present value of your profits over the next 8 years?
Answer - $658429.67
If the solution helped, please give it a thumbs up. Thank you.
Your business is expected to generate an $88,888 profit at the end of year 1, and...
Without using Excel.
3) Your business is expected to generate an $88,888 profit at the end of year 1, and profit will increase by 8% per year through year 8. If the annual interest is 8%, what is the present value of your profits over the next 8 years?
The owner of a business expects to make a net profit of $21,000 in the end of each year over the next five years and to be able to sell the business at the end of the fifth year for $120,000. The owner of the business also believes that the appropriate annual discount rate is 7%. Calculate the (present) value of the business. B) A small company received a $80,000 loan at a 7% annual interest rate and the loan...
Your company will generate $68,000 in annual revenue each year for the next Your company will generate $68,000 in annual revenue each year for the next seven years from a new information database. If the appropriate interest rate is 8.5 percent, what is the present value of the savings? 68,000 Annual savings # of years Interest rate on annuity 8.5% .No Complete the following analysis. Do not hard code values in your calculations. Your answers should be positive. Present value
1)How much money do you need to deposit into an account annually if you desire to have $9 million in 45 years. Assume a 4% annual interest rate, compounded annually. Your first deposit will occur at the end of the first year. 2) Your machine operator is becoming more productive and generates additional profit each year. You expect to receive $39,000 in profit at the end of the year, but this will increase by 8% a year for the next...
You are preparing to pitch your company on an episode of the Dragon’s Den and need to come up with a value for your company. One method of valuing a company is to calculate the present value of future cash flows over a period of time. You decide to value your company based on the profits of the company for the next 8 years using a discount rate of 9%. You know that this year’s profit will be $90,000 and...
in a friend's business. She will be paying you $11,382 at the end of this year, $22,764 at the end of next year, and $34,146 at the end of the year afer that You have just from today) The nterest rate is 3 4% per year a. What is the present value of your windfall? b. What is the future value of your windfall in three years (on the date of the last payment)? a windfall from an investment you...
Problem 1. Net Present Value. You are a gym manager. Based on your estimates, the gym will generate the profits of $330 in a year, $270 in two years, and $190 in three years. The interest rate is 8%. a) Calculate the Present Value of the stream of profits. PV = b) You are considering adding a swimming pool. What is the maximum amount you would be willing to pay for it if it will increase the profits by 30%...
Acquired developed technology is expected to generate after-tax operating income of $50,000 in the first year and grow at a rate of 5% over the next two years. Depreciation expense included in operating expenses is expected to be $5,000 in the first year, growing at a rate of 3% over the next two years. The value of acquired developed technology is estimated as the present value of operating cash flow over the first three years. The appropriate discount rate is...
Your rich aunt is going to give you an end-of-year gift of $1,100 for each of the next 10 years. a. If general price inflation is expected to average 6% per year during the next 10 years, what is the equivalent value of these gifts at the present time? The real interest rate is 5% per year. b. Suppose that your aunt specified that the annual gifts of $1,100 are to be increased by 6% each year to keep pace...
8. Your company will generate $73,000 in annual savings each year for the next eight years from a new information data base. If the appropriate discount rate is 8.5%, what is the present value of the savings?