Goran owns a medical clinic that has a cost of capital of 15.73 percent. The medical clinic is expected to produce annual cash flows of 65,967 dollars for 5 years. The first annual cash flow of 65,967 dollars is expected later today. In addition to the annual cash flows of 65,967 dollars, the medical clinic is also expected to produce a special, one-time cash flow of 54,349 dollars in 2 years from today. How much is Goran’s medical clinic worth?
| Year | Cashflows | PVF at 15.73% | Present value | |
| 1 | 65967 | 0.86408 | 57000.78 | |
| 2 | 120316 | 0.746635 | 89832.08 | |
| 3 | 65967 | 0.645152 | 42558.75 | |
| 4 | 65967 | 0.557463 | 36774.17 | |
| 5 | 65967 | 0.481693 | 31775.83 | |
| Present worth of Clinic | 257942 | |||
Goran owns a medical clinic that has a cost of capital of 15.73 percent. The medical...
An investment, which is worth 30,300 dollars and has an expected return of 7.42 percent, is expected to pay fixed annual cash flows forever with the next annual cash flow expected in 1 year. What is the present value of the annual cash flow that is expected in 7 years from today? Quantum Pizza took out a loan from the bank today for 24,500 dollars. The loan requires Quantum Pizza to make a special payment of 13,500 dollars to the...
Tanner owns an investment that is expected to pay him 4,380 dollars per quarter forever with the next payment of 4,380 dollars expected in 3 months from today. The investment has an annual return of 7.08 percent. What is the value of the investment? A movie is expected to produce cash flows of 15,800 dollars per month with the first monthly cash flow expected later today and the last monthly cash flow expected in 5 months from today. The cost...
Yasmin owns a(n) race track that is worth 417,741 dollars and is expected to make annual cash flows forever. The cost of capital for the race track is 10.54 percent. The next annual cash flow is expected in one year from today and all subsequent cash flows are expected to grow annually by 4.21 percent. What is the cash flow produced by the race track in 7 years from today expected to be?
Step by step solution please 19. Arjen owns investment A and 1 bond B. The total value of his holdings is 1,868 dollars. Investment A is expected to pay annual cash flows to Arjen of 153.77 dollars per year with the first annual cash flow expected later today and the last annual cash flow expected in 3 years from today. Investment A has an expected return of 12.62 percent. Bond B pays semi-annual coupons, matures in 14 years, has a...
An investment, which is worth 26,400 dollars and has an expected return of 4.53 percent, is expected to pay fixed annual cash flows forever with the next annual cash flow expected in 1 year. What is the present value of the annual cash flow that is expected in 7 years from today?
Platinum Water Food is evaluating a project that would cost 8,950 dollars today. The project is expected to produce annual cash flows of 757.17 dollars forever with the first annual cash flow expected in 1 year. The cost of capital associated with the project is 6.12 percent and the project’s internal rate of return is 8.46 percent. What is the net present value (NPV) of the project?
A factory is worth $3,200. It is expected to produce equal monthly cash flows of $300 for 9 months with the first monthly cash flow expected later today. The factory is also expected to make an extra cash flow of $1,000 in 7 months. What is the monthly cost of capital for the factory?
An investment, which has an expected return of 11.43 percent, is expected to make annual cash flows forever. The first annual cash flow is expected in 1 year and all subsequent annual cash flows are expected to grow at a constant rate of 1.05 percent per year. The cash flow in 1 year from today is expected to be 19,090 dollars. What is the present value (as of today) of the cash flow that is expected to be made in...
9. An investment, which has an expected return of 18.29 percent, is expected to make annual cash flows forever. The first annual cash flow is expected in 1 year and all subsequent annual cash flows are expected to grow at a constant rate of 5.03 percent per year. The cash flow in 1 year from today is expected to be 28,390 dollars. What is the present value (as of today) of the cash flow that is expected to be made...
A business has a current cash flow of sh 400,000. Currently, its cost of capital is estimated at 10%. Required a) Assuming it will generate these cash flows every year till infinity, how much is it worth today. b) Assume the cash flows will grow at 8% in the first 4 years and stabilize at 5% from year five on wards. Calculate the value of the business today if return required by investors today is 12%