Answer is $98.50
Future Value = $262
Cost of Capital = 15%
Period = 7 years
Present Value = Future Value / (1 + Cost of
Capital)^Period
Present Value = $262 / 1.15^7
Present Value = $98.50
of the cost of capital is 15%, what is the PV of $262 paid in year...
If the cost of capital is 6%, what is the PV of $350 paid in your 12? Round your answer to two decimal places
Wainright Co. has identified an investment project with the following cash flows. Year Cash Flow $ 720 1 2 930 1,190 1,275 4 If the discount rate is 10 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Present value What is the present value at 18 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g.,...
4. Value: value 4.00 points Balloons By Sunset (BBS) is considering the purchase of two new hot air balloons so that it can expand its des Initial investment (for two hot air balloons) Useful life Salvage value Annual net income generated BBS's cost of capital S 441,000 9 years S 54,000 35,721 10% Assume straight line depreciation method is used. Required: Help BBS evaluate this project by calculating each of the following: 1. Accounting rate of return. (Round your answer...
a. Estimate the opportunity cost of capital and
the project’s PV (using the same rate to discount each cash flow).
(Do not round intermediate calculations. Enter your cost of
capital answer as a percent and enter your PV answer in thousands.
Round your answers to 2 decimal places.)
b. What are the certainty-equivalent cash flows
in each year? (Do not round intermediate calculations.
Enter your answers in thousands rounded to 2 decimal
places.)
c. What is the ratio of the...
7. Problem 5.07 Click here to read the eBook: Future Values Click here to read the eBook: Present Values Problem Walk-Through PRESENT AND FUTURE VALUES OF A CASH FLOW STREAM An investment will pay $50 at the end of each of the next 3 years, $250 at the end of Year 4, $350 at the end of Year 5, and $550 at the end of Year 6. a. If other investments of equal risk earn 7% annually, what is its...
value: 2.00 points You've just joined the investment banking firm of Dewey, Cheatum, and Howe. They've offered you two different salary arrangements. You can have $85,000 per year for the next two years, or you can have $74,000 per year for the next two years, along with a $30,000 signing bonus today. The bonus is paid immediately, and the salary is paid in equal amounts at the end of each month. If the interest rate is 9 percent compounded monthly,...
Homework Provided are links to the present and future value tables: PV of $1. EV of $1. PVA of $1. and EVA of $1 (Use appropriate factor(s) from the tables provided. Round your answer to the nearest whole dollar.) a. How much would you have to deposit today if you wanted to have $40,000 in five years? Annual Interest rate is 8%. b. Assume that you are saving up for a trip around the world when you graduate in three...
Your landscaping company can lease a truck for $7,700 a year (paid at year-end) for 7 years. It can instead buy the truck for $41,000. The truck will be valueless after 7 years. The interest rate your company can earn on its funds is 8%. a. What is the present value of the cost of leasing? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Present value of lease Present value of b. Is it cheaper to...
10.00 points Assume coupons are paid annually. Here are the prices of three bonds with 10-year maturities: 84.50 03.50 134.50 10 a. What is the yield to maturity of each bond? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Bond Coupon (96) ITCH 7 10 b. What is the duration of each bond? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Bond Coupon( 7 10 years years years...
Saved Help Save & Exit Subn Check my work 9 Problem 5-21 Annuities (LO3) Calculate the present value of the following o-1. Annual payment of $975 for 12 years at 3% interest (Do not round intermediate calculations. Round your answer to 2 decimal places.) 10 polnts eBook Present value 683 85 6-2. Annual payment of S775 for 17 years at 3% interest (Do not round intermediate calculations. Round your answer to 2 decimal places.) Present value a-3. Which option would...