You just signed a business contract with one of your clients. The client will pay you...
You just signed a business contract with one of your clients. The client will pay you the equivalent of $75,000 of today's money a year for five years for the service you will provide. You anticipate the general inflation rate over this period to be 3%. If your desired inflation-free interest rate (real interest rate) is to be 4%, what is the worth of the fifth payment in present dollars? Assume the client will pay the consulting fee at the end of each year.
I saw another answer that used the nominal interest rate in order to find the solution, but I do not understand how to derive the nominal interest rate.
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You just signed a business contract with one of your clients.
The client will pay you...
You just signed a business consulting contract with one of your clients. The client will pay...
You just signed a business consulting contract with one of your clients. The client will pay you $30,000 a year for 5 years for the service you will provide over this period. You anticipate the general inflation rate over this period to be 3.5%. If your desired inflation-free interest rate to be 14%, what is the worth of the 5th payment in today’s dollars?
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Imagine you borrow $800 from your roommate, agreeing to pay her back $800 plus 11 percent...
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Imagine you borrow $600 from your roommate, agreeing to pay her back $600 plus 7 percent...
Imagine you borrow $600 from your roommate, agreeing to pay her back $600 plus 7 percent nominal interest in one year. Assume inflation over the life of the contract is expected to be 4.62 percent. What is the total dollar amount you will have to pay her back in a year? What approximate percentage of the interest payment is the result of the real rate of interest?
2.You borrowed $1,500 for one year, and agreed to pay back $1,680. At the outset you...
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Your company has just signed a three-year nonrenewable contract with the city of New Orleans for...
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Your company has just signed a three-year nonrenewable contract with the city of New Orleans for...
Your company has just signed a three-year nonrenewable contract
with the city of New Orleans for earthmoving work. You are
investigating the purchase of heavy construction equipment for this
job. The equipment costs $196,000 and qualifies for five-year
MACRS depreciation. At the end of the three-year contract, you
expect to be able to sell the equipment for $77,000. If the
projected operating expense for the equipment is $61,000 per
year, what is the after-tax equivalent uniform annual cost (EUAC)
of...
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Your company has just signed a three-year nonrenewable contract with the city of New Orleans for earthmoving work. You are investigating the purchase of heavy construction equipment for this job. The equipment costs $201,000 and qualifies for five-year MACRS depreciation. At the end of the three-year contract, you expect to be able to sell the equipment for $80,000. If the projected operating expense for the equipment is $63,000 per year, what is the after-tax equivalent uniform annual cost (EUAC) of...
Your company has just signed a three-year nonrenewable contract
with the city of New Orleans for earthmoving work. You are
investigating the purchase of heavy construction equipment for this
job. The equipment costs $196,000 and qualifies for five-year
MACRS depreciation. At the end of the three-year contract, you
expect to be able to sell the equipment for $77,000. If the
projected operating expense for the equipment is $61,000 per
year, what is the after-tax equivalent uniform annual cost (EUAC)
of...
22. You have graduated from a degree in sports business and just landed your dream job as a sports agent. Your first client is an up and coming free solo climber. You are looking for sponsors for your client. Gatorade will contract with your client for five years if your client will post at least 5 Instagram pictures a month with a strong presence of the beverage in each photo as your client engages in free solo climbing activities. Gatorade...
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