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You own an oll plpeline that wll generate a $2.8 million cash return over the coming...
You own an oil pipeline that will generate a $2 million cash return over the coming...
You own an oil pipeline that will generate a $2 million cash return over the coming year. The pipelines operating costs are negligible, It is expected to last for a very long time. Unfortunately the volume of oil ship is declining and cash flows are expected to decline by 4% per year. The discount rate is 10%. What is the PV of the pipelines cash flows if its cash flows are assumed to last for ever? don round intermediate calculations....
Declining perpetuities and annuities. You own an oil pipeline that will generate a $2 million cash...
Declining perpetuities and annuities. You own an oil pipeline that will generate a $2 million cash return over the coming year. The pipeline’s operating costs are negligible, and it is expected to last for a very long time. Unfortunately, the volume of oil shipped is declining, and cash flows are expected to decline by 4% per year. The discount rate is 10%. What is the PV of the pipeline’s cash flows if its cash flows are assumed to last forever?...
0.00 points genrane a S2 8 milion cash resm over the coing year. The peine scperatrg...
0.00 points genrane a S2 8 milion cash resm over the coing year. The peine scperatrg costs ae neg g ble and t s expected to last tra ery ion ǐe.utnnsey the volne otish declining and cash tows are expected to decline by 55% per year. The dsoort rate s 12% ล.what isinePVofthe eiescash nows r its cash flows are assured to last forever? (Do not round intermedate calculations. Round your anaw to the nearest nnole dollar mount.) Present value...
a. The cost of a new automobile is $11,900 lf he interest rate is 4%, how...
a. The cost of a new automobile is $11,900 lf he interest rate is 4%, how much would you have to set aside now to provide this sum in four years? Do not round intermediate calculations. Round your answer to 2 decimal places.) Present value b, You have to pay $15,000 a year in school fees at the end of each of the next five years. If the Interest rate is 7%, how much do you need to set aside...
You need 400,000 to buy a flat. So, you go to the bank and ask for that amount. The bank offers an annual interest rate of 3%, and the loan has to be paid back in 20 years, in constant monthly...
You need 400,000 to buy a flat. So, you go to the bank and ask for that amount. The bank offers an annual interest rate of 3%, and the loan has to be paid back in 20 years, in constant monthly payments. Calculate how much you'll have to pay back to the bank every month (write the result with no decimal points) Answer: How much you should invest today in a financial product that offers a 5% interest rate (compounded...
Consider the following cash flows: Cash Flows ($) CO С1 -7,750 5,500 20,000 a. Calculate the...
Consider the following cash flows: Cash Flows ($) CO С1 -7,750 5,500 20,000 a. Calculate the net present value of the above project for discount rates of 0, 50, and 100%. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) NPV 0% NPV @50% NPV @100% b. What is the IRR of the project? (Do not round intermediate calculations. Enter your answer as a percent rounded to the nearest whole number.) IRR
Need help with part b. Thank you, Problem 6-8 Equivalent annual cash flows Machines A and...
Need help with part b. Thank
you,
Problem 6-8 Equivalent annual cash flows Machines A and B are mutually exclusive and are expected to produce the following real cash flows Cash Flows ($ thousands) C -118 -72 Machine +128 +106 +100 +72 +78 The real opportunity cost of capital is 9% a. Calculate the NPV of each machine. (Do not round intermediate calculations. Enter your answers in dollars not in thousands, e.g 123,456. Round your answers to the nearest whole...
1. An investment that costs $36,500 will produce annual cash flows of $12,210 for a period...
1. An investment that costs $36,500 will produce annual cash flows of $12,210 for a period of 4 years. Given a desired rate of return of 10%, the investment will generate a (Do not round your PV factors and intermediate calculations. Round your answer to the nearest whole dollar): negative net present value of $2,204. positive net present value of $2,204. negative net present value of $38,704. positive net present value of $38,704. 2. The amount of the depreciation tax...
5. Assume the company requires a 12% rate of return on its investments. Compute the net present value of each potential investment. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate fact...
5. Assume the company requires a 12% rate of return on its investments. Compute the net present value of each potential investment. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) A new operating system for an existing machine is expected to cost $530,000 and have a useful life of six years. The system yields an incremental after-tax income of $200,000 each year after deducting its straight-line depreciation. The...
Problem 16-20 (Modified) The Harding Corporation has $50.5 million of bonds outstanding that were issued at...
Problem 16-20 (Modified) The Harding Corporation has $50.5 million of bonds outstanding that were issued at a coupon rate of 1275 percent seven years ago. Interest rates have fallen to 11.5 percent. Preston Alter, the vice-president of finance, does not expect rates to fall any further. The bonds have 18 years left to maturity, and Preston would like to refund the bonds with a new issue of equal amount also having 18 years to maturity The Harding Corporation has a...
0.00 points genrane a S2 8 milion cash resm over the coing year. The peine scperatrg costs ae neg g ble and t s expected to last tra ery ion ǐe.utnnsey the volne otish declining and cash tows are expected to decline by 55% per year. The dsoort rate s 12% ล.what isinePVofthe eiescash nows r its cash flows are assured to last forever? (Do not round intermedate calculations. Round your anaw to the nearest nnole dollar mount.) Present value...
a. The cost of a new automobile is $11,900 lf he interest rate is 4%, how much would you have to set aside now to provide this sum in four years? Do not round intermediate calculations. Round your answer to 2 decimal places.) Present value b, You have to pay $15,000 a year in school fees at the end of each of the next five years. If the Interest rate is 7%, how much do you need to set aside...
You need 400,000 to buy a flat. So, you go to the bank and ask for that amount. The bank offers an annual interest rate of 3%, and the loan has to be paid back in 20 years, in constant monthly payments. Calculate how much you'll have to pay back to the bank every month (write the result with no decimal points) Answer: How much you should invest today in a financial product that offers a 5% interest rate (compounded...
Consider the following cash flows: Cash Flows ($) CO С1 -7,750 5,500 20,000 a. Calculate the net present value of the above project for discount rates of 0, 50, and 100%. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) NPV 0% NPV @50% NPV @100% b. What is the IRR of the project? (Do not round intermediate calculations. Enter your answer as a percent rounded to the nearest whole number.) IRR
Need help with part b. Thank
you,
Problem 6-8 Equivalent annual cash flows Machines A and B are mutually exclusive and are expected to produce the following real cash flows Cash Flows ($ thousands) C -118 -72 Machine +128 +106 +100 +72 +78 The real opportunity cost of capital is 9% a. Calculate the NPV of each machine. (Do not round intermediate calculations. Enter your answers in dollars not in thousands, e.g 123,456. Round your answers to the nearest whole...
Problem 16-20 (Modified) The Harding Corporation has $50.5 million of bonds outstanding that were issued at a coupon rate of 1275 percent seven years ago. Interest rates have fallen to 11.5 percent. Preston Alter, the vice-president of finance, does not expect rates to fall any further. The bonds have 18 years left to maturity, and Preston would like to refund the bonds with a new issue of equal amount also having 18 years to maturity The Harding Corporation has a...
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