What discount rate would make you indifferent between receiving $3,492.00 per year forever and $5,668.00 per year for 29.00 years? Assume the first payment of both cash flow streams occurs in one year.
Also if there is a way to input it on calculator without long math, please include (with keystrokes). Thanks
This can be solved as under
PV of perpetuity = PV of Annuity
A/r = A[1-1/(1+r)^n / r]
A = annuity, r = rate of interest , n = number of period
3492/r = 5668[1-1/(1+r)^29 /r]
3492/5668 = r[[1-1/(1+r)^29 /r]
0.61609 =1-1/(1+r)^29
1/(1+r)^29 = 1-0.61609
1/(1+r)^29=0.3839
(1+r)^29 = 2.60477
(1+r) = 2.60477^1/29
(1+r) = 1.03356
r = 0.03356
ie 3.356%
What discount rate would make you indifferent between receiving $3,492.00 per year forever and $5,668.00 per...
What discount rate would make you indifferent between receiving $3,401.00 per year forever and $5,060.00 per year for 29.00 years? Assume the first payment of both cash flow streams occurs in one year.
What discount rate would make you indifferent between receiving $3,965.00 per year forever and $5,295.00 per year for 26.00 years? Assume the first payment of both cash flow streams occurs in one year.
What discount rate would make you indifferent between receiving $3,393.00 per year forever and $5,267.00 per year for 23.00 years? Assume the first payment of both cash flow streams occurs in one year.
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...
If you are willing to pay $46,850.00 today to receive $4,341.00 per year forever then your required rate of return must be ____%. Assume the first payment is received one year from today. If you are willing to pay $20,509.00 today to receive a perpetuity with the first payment occurring next year then the payment must be $______. Assume a 7.00% discount rate. What discount rate would make you indifferent between receiving $3,727.00 per year forever and $5,271.00 per year...
If you are willing to pay $44,793.00 today to receive $4,189.00 per year forever then your required rate of return must be ____%. Assume the first payment is received one year from today. If you are willing to pay $29,453.00 today to receive a perpetuity with the first payment occurring next year then the payment must be $______. Assume a 15.00% discount rate. What discount rate would make you indifferent between receiving $3,526.00 per year forever and $5,610.00 per year...
What is the value today of receiving $1,536.00 per year forever? Assume the first payment is made next year and the discount rate is 12.00%. What is the value today of receiving $2,737.00 per year forever? Assume the first payment is made 6.00 years from today and the discount rate is 12.00%.
What is the value today of receiving $2,472.00 per year forever? Assume the first payment is made 8.00 years from today and the discount rate is 9.00%.
What is the value today of receiving $1,065.00 per year forever? Assume the first payment is made next year and the discount rate is 11.00%.
What is the value today of receiving $2,593.00 per year forever? Assume the first payment is made 8.00 years from today and the discount rate is 6.00%. Submit Answer format: Currency: Round to: 2 decimal places. unanswered not_submitted #4 If you are willing to pay $49,200.00 today to receive $4,333.00 per year forever then your required rate of return must be ____%. Assume the first payment is received one year from today. Submit Answer format: Percentage Round to: 2 decimal...