Homework Answers
The value of any asset is the present value of the cash flows the asset is expected to provide. The cash flows a business is able to provide to it's investors is it's free cash flow. This is the reason that FCF is so important in finance is TRUE.
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The value of any asset is the present value of the cash flows the asset is...
The ____ of any asset is equal to the present value of its expected future cash flows discounted ...
the ____ of any asset is equal to the present value of its expected future cash flows discounted at the investors required rate of return
what is the Present Value of an asset that pays the following cash flows, if you...
what is the Present Value of an asset that pays the following cash flows, if you can invest them at a rate of return of 5%? Time Period Cash Flow 0 2 4 75 75 75 75 75 Note: this is an 'ordinary annuity', it is the default assumption for both Excel and your financial calculator. a) Identify the assumptions given in this problem Rate of Return # of years Annual Payment Future Value b) Solve this problem using the...
A. The excess of the present value of future cash flows over the initial investment outlay...
A. The excess of the present value of future cash flows over the initial investment outlay for a project is the: 1. Internal rate of return (IRR) of the project 2. Modified internal rate of return (MIRR) on the project 3. Book (accounting) rate of return for the project 4. Net present value (NPV) of the project 5. Modified internal rate of return (MIRR) of the project B. Items that have cash flow effects during the operating phase of an...
Why do Investors and Companies Care about Intrinsic Value? The intrinsic value of a firm is...
Why do Investors and Companies Care about Intrinsic Value? The intrinsic value of a firm is determined by the size, timing, and risk of its expected future free cash flows (FCF). There are two models used to estimate intrinsic values: the discounted dividend model and the corporate valuation model. The discounted cash flow (or DCF) approach describes a method of valuing a project, company, or asset using the concepts of the time value of money. All future cash flows are...
5. Free cash flow and financial statements Aa Aa The primary objective of the corporate management team is to maximize shareholder wealth. The company's board of directors and the shareholders ev...
5. Free cash flow and financial statements Aa Aa The primary objective of the corporate management team is to maximize shareholder wealth. The company's board of directors and the shareholders evaluate and review managerial actions based on the growth in the value of the irm Based on your understanding of what determines a firm's value, review the following: What does the value of a firm depend on? The ability to generate cash flow that is available to distribute to the...
True or false: Value of a bond is not the Present Value of the Cash Flows
True or false: Value of a bond is not the Present Value of the Cash Flows
Based on your understanding of what determines a firm's value, review the following What does the...
Based on your understanding of what determines a firm's value, review the following What does the value of a firm depend on? Option A The ability to generate cash flow that is available to distribute to the company's investors, including creditors and stockholders The ability to generate cash flow that is available to distribute to the company's stockholders only Option B Which of the options is most accurate? Option A O Option B When determining the value of a firm,...
state whether each statement 1-8 if its true or false Consider the balance sheet of Wilkes...
state whether each statement 1-8 if its true or
false
Consider the balance sheet of Wilkes Industries as shown below. Because Wilkes has $800,000 of retained carnings, the company would be able to pay cash to buy an asset with a cost of $200.000 Cash Inventory Accounts receivable Total Current Assets Net fixed assets $ 50.000 Accounts payable 200.000 Accruals 250.000 Total Current Liabilities S500.000 Debt $ 900.000 Common stock Retained carnings 51.400.000 Total Liabilities & Equity $ 100.000 100.000...
When compiling the relevant cash flows for a project, the after-tax value of any asset sold...
When compiling the relevant cash flows for a project, the after-tax value of any asset sold any time during the life of the project should be treated as a - cash flow in the year of sale -change in net working capital -cash flow in the last year of the project - reduction in the cash flow for Time 0 - cash outflow at Time 0
a. What is the present value of the following set of cash flows, discounted at 10.8...
a. What is the present value of the following set of cash
flows, discounted at 10.8 % per year?
a. What is the present value of the following set of cash flows, discounted at 10.8% per year? Year - CF $8 $19 $19 $30 b. What is the present value of the following set of cash flows, discounted at 10.8% per year? Year CF $52 $41 $30 $ 19 9 8 c. Each set contains the same cash flows ($8,...
what is the Present Value of an asset that pays the following cash flows, if you can invest them at a rate of return of 5%? Time Period Cash Flow 0 2 4 75 75 75 75 75 Note: this is an 'ordinary annuity', it is the default assumption for both Excel and your financial calculator. a) Identify the assumptions given in this problem Rate of Return # of years Annual Payment Future Value b) Solve this problem using the...
5. Free cash flow and financial statements Aa Aa The primary objective of the corporate management team is to maximize shareholder wealth. The company's board of directors and the shareholders evaluate and review managerial actions based on the growth in the value of the irm Based on your understanding of what determines a firm's value, review the following: What does the value of a firm depend on? The ability to generate cash flow that is available to distribute to the...
Based on your understanding of what determines a firm's value, review the following What does the value of a firm depend on? Option A The ability to generate cash flow that is available to distribute to the company's investors, including creditors and stockholders The ability to generate cash flow that is available to distribute to the company's stockholders only Option B Which of the options is most accurate? Option A O Option B When determining the value of a firm,...
state whether each statement 1-8 if its true or
false
Consider the balance sheet of Wilkes Industries as shown below. Because Wilkes has $800,000 of retained carnings, the company would be able to pay cash to buy an asset with a cost of $200.000 Cash Inventory Accounts receivable Total Current Assets Net fixed assets $ 50.000 Accounts payable 200.000 Accruals 250.000 Total Current Liabilities S500.000 Debt $ 900.000 Common stock Retained carnings 51.400.000 Total Liabilities & Equity $ 100.000 100.000...
a. What is the present value of the following set of cash
flows, discounted at 10.8 % per year?
a. What is the present value of the following set of cash flows, discounted at 10.8% per year? Year - CF $8 $19 $19 $30 b. What is the present value of the following set of cash flows, discounted at 10.8% per year? Year CF $52 $41 $30 $ 19 9 8 c. Each set contains the same cash flows ($8,...
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