Your consulting firm will produce cash flows of $165,000 this year, and you expect cash flow...
Your consulting firm will produce cash flows of $165,000 this year, and you expect cash flow to keep pace with any increase in the general level of prices. The interest rate currently is 5.7%, and you anticipate inflation of about 1.7%.
a. What is the present value of your firm’s cash flows for years 1 through 4? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Present value: ???
Update: (I got 589,850.25 but it says that's wrong.)
Homework Answers
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Your consulting firm will produce cash flows of $165,000 this
year, and you expect cash flow...
Your consulting firm will produce cash flows of $195,000 this year, and you expect cash flow...
Your consulting firm will produce cash flows of $195,000 this
year, and you expect cash flow to keep pace with any increase in
the general level of prices. The interest rate currently is 5.1%,
and you anticipate inflation of about 1.1%. a. What is the present
value of your firm’s cash flows for years 1 through 4? (Do not
round intermediate calculations. Round your answer to 2 decimal
places.) b. How would your answer to (a) change if you anticipated...
Your consulting firm will produce cash flows of $155,000 this year, and you expect cash flow...
Your consulting firm will produce cash flows of $155,000 this year, and you expect cash flow to keep pace with any increase in the general level of prices. The interest rate currently is 5.9%, and you anticipate inflation of about 1.9%. a. What is the present value of your firm's cash flows for years 1 through 6? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Present value $ 691,372.85 b. How would your answer to (a)...
Wilkinson Co. has identified an investment project with the following cash flows: Year Cash Flow...
Wilkinson Co. has identified an investment project with the following cash flows: Year Cash Flow 1 $ 730 2 950 3 1,210 4 1,300 If the discount rate is 8 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value $ If the discount rate is 18 percent, what is the present value of these cash flows? (Do not round...
Management of a firm with a cost of capital of 10 percent is considering a $126,000 investment with annual cash flow of...
Management of a firm with a cost of capital of 10 percent is considering a $126,000 investment with annual cash flow of $52,460 for three years. Use Appendix A and Appendix D to answer the questions. What are the investment’s net present value and internal rate of return? Use a minus sign to enter a negative value, if any. Round your answers for the net present value to the nearest dollar and for the internal rate of return to the...
Wainright Co. has identified an investment project with the following cash flows. Year Cash Flow $...
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.,...
Assume the appropriate discount rate for the following cash flows is 8.8 percent. Year Cash Flow...
Assume the appropriate discount rate for the following cash flows is 8.8 percent. Year Cash Flow $1,400 1.300 1,000 800 What is the present value of the cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value
Huggins Co. has identified an investment project with the following cash flows. YEAR Cash Flow 1...
Huggins Co. has identified an investment project with the following cash flows. YEAR Cash Flow 1 $740 2 $970 3 $1230 4 $1325 If the discount rate is 9 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your 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 answer to 2 decimal places, e.g., 32.16.)...
Restate the above net cash flow in real terms. Discount the restated cash flows at a...
Restate the above net cash flow in real terms. Discount the
restated cash flows at a real discount rate. Assume a 20% nominal
rate and 10% expected inflation. NPV should be unchanged at +2,593,
or $2,593,000.
($ thousands) Period 1 - 14,100 -1,634 3.097 - 14,100 -1,362 2.151 2,593 (sum of PVS) Net cash flow Present value at 20% Net present value 3 6,473 3.746 4 10.684 5,152 5 10,135 4,073 6 5.907 1,978 7 3.419 954 Restate the above...
An investment that costs $5,000 will produce annual cash flows of $2,000 for a period of...
An investment that costs $5,000 will produce annual cash flows of $2,000 for a period of 4 years. Given a desired rate of return of 10%, what is the present value index? Use Appendix Table 2. (Do not round your intermediate calculations. Round your answer to three decimal points.)
Consider four projects, which you expect to generate the following cash flows: Year Project A &nbs
Consider four projects, which you expect to generate the following cash flows: Year Project A Project B Project C Project D 0 (200,000) (2,000) (200,000) (200,000) 1 210,000 18,000 100,000 90,000 2 (100,000 is for project c & d ONLY) 100,000 100,000 3 100,000 115,000 , Your required return on all of the investments is 8%. For each project estimate the Payback Period, Internal Rate...
Your consulting firm will produce cash flows of $195,000 this
year, and you expect cash flow to keep pace with any increase in
the general level of prices. The interest rate currently is 5.1%,
and you anticipate inflation of about 1.1%. a. What is the present
value of your firm’s cash flows for years 1 through 4? (Do not
round intermediate calculations. Round your answer to 2 decimal
places.) b. How would your answer to (a) change if you anticipated...
Your consulting firm will produce cash flows of $155,000 this year, and you expect cash flow to keep pace with any increase in the general level of prices. The interest rate currently is 5.9%, and you anticipate inflation of about 1.9%. a. What is the present value of your firm's cash flows for years 1 through 6? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Present value $ 691,372.85 b. How would your answer to (a)...
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.,...
Assume the appropriate discount rate for the following cash flows is 8.8 percent. Year Cash Flow $1,400 1.300 1,000 800 What is the present value of the cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value
Restate the above net cash flow in real terms. Discount the
restated cash flows at a real discount rate. Assume a 20% nominal
rate and 10% expected inflation. NPV should be unchanged at +2,593,
or $2,593,000.
($ thousands) Period 1 - 14,100 -1,634 3.097 - 14,100 -1,362 2.151 2,593 (sum of PVS) Net cash flow Present value at 20% Net present value 3 6,473 3.746 4 10.684 5,152 5 10,135 4,073 6 5.907 1,978 7 3.419 954 Restate the above...
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