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 of capital for the movie is 14.52 percent per year. What is the value of the movie?
1)
Value of the investment:
= Next quarterly receipt/Quarterly rate
= $4,380/(7.08%/4)
= $247,457.63
Tanner owns an investment that is expected to pay him 4,380 dollars per quarter forever with...
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