Find the present value of this cash flow stream. 2. Find the future value of this cash flow stream please use formula or any necessary diagram. please provide steps and explanation
Q: 18. Troy's Tire Mart has a replacement value of $965, 000 and is insured for $588, 000, with an 80%…
A: The following information has been provided in the question: Replacement value =$965,000 Insurance…
Q: If the manager of a gold mine wants to protect its operations against a market price decline, while…
A: It is a financial instrument whose value/price is determined by the given assets. Options, forwards,…
Q: GS Co.’s capital structure consists entirely of long-term liabilities and common equity. The cost of…
A: Cost of long term liabilities (Kd) = 0.03 Cost of common equity (Ke) = 0.05 Tax rate (T) = 0.30…
Q: Joe's starting salary as a mechanical engineer is ar Joe is planning to place a total of 8% of his…
A: Joe's salary in the first year is $100,000. 8% of the salary is invested into a mutual fund.…
Q: You expect to receive $150,000 per year on a contract that will last 5 years. You are trying to…
A: Present value of future cash inflows will be equal to the worth of contract today. Worth of…
Q: Suppose that the CAPM holds and that BP’s stock has a beta of 2. the required rate of return on BP…
A: Stocks refer to the concept which denotes the security that represents the holder's ownership in the…
Q: poking to purchase a home that costs $ 160,000. The interest rate is currently at 3.7 %. payment…
A: Mortgage loans are paid by equal monthly payments that carry the payment of interest and payment of…
Q: Complete the following, using ordinary interest. (Use Days in a year table.) (Do not round…
A: Ordinary Interest: Ordinary Interest is computed based on the 360 days per year (or 30 days a…
Q: 4. In a CDS the accrual payment is a payment made by CDS and occurs when the to CDS defaults a.…
A: CDS refers to the credit default swap. Under CDS buyer makes the series of agreed payment to the…
Q: Tax evasion and tax avoidance costs the UK government £34 billion a year.” In the light of the above…
A: Tax evasion: One sign of tax evasion is the amount of unreported income, which is the difference…
Q: Larry wants to make a decision on a six- year amortized loan for him to buy a new car. The value of…
A: Value of the car = $33560 Annual interest rate = 0.1406 Monthly interest rate (r) =…
Q: Consider the following cash flows. The interest rate is 10%. What is the total wealth after 2 years…
A: It is given that: Year Cash flow 1 150 2 120 3 100 4 200 And the Expected…
Q: You just won the NY State Lottery. The Grand Prize is $275 million. Lottery officials give you a…
A: Present value of annuities to be received in future would give the value of money today can be…
Q: Company has insufficient retained earnings to fund capital expenditures and decided to issue new…
A: Cost of equity = (Expected dividend / (Current price - Floatation cost)) + Growth rate Where…
Q: 1. What is the percentage change in the PV of $100 due in 1 year when the interest rate changes…
A: Time value of money (TVM) refers to the method used to measure the amount of money at different…
Q: Which of the following is not correct about sole proprietorship?
A: There are different form of doing business doing alone ,doing with partners or doing with large…
Q: The following information is available on two mutually exclusive projects. All numbers are in ‘000s.…
A: NPV Method: Working in '000s and calculation are done in excel so there is no intermediate rounding:…
Q: Suppose Acap Corporation will pay a dividend of $2.79 per share at the ye share next year. You…
A: Price of stock would be present value of dividends and expected future price of stock and also that…
Q: ibe how agency conflicts in multinational corporation can be addres
A: Agency problem exist in the corporation due to conflict of interest between the managers and…
Q: Which of the following is true? A.Forward contract buyers and sellers do not know who the…
A: Forward and futures contracts are derivatives agreements in which two parties associate to acquire…
Q: Ritter Sports Industries has preferred stock outstanding with a par value of $100. The stock pays a…
A: To calculate the effective rate of return we will use below formula Effective rate of return =…
Q: Tower City aims to construct a new bypass between two main routes that will reduce commuter travel…
A: Here, Cost of Route is $15 million Cost Savings is 17500 people $100 per year Cost Expense is $7500…
Q: [S1] A proxy fight involves having shareholders looking for board members that will allow an…
A: A proxy fight is an activity through which certain activist shareholders try to tempt other…
Q: What is the present value of an investment that pays $103 at the end of each of years 1, 2, and 3?…
A: Time value of money (TVM) refers to the method used to measure the amount of money at different…
Q: A firm has an net operating profit of P300,000, interest of P35,000, and a tax rate of 25%. The firm…
A: WACC = (Cost of equity * Weight of equity) + (Cost of debt * Weight of Debt * (1- Tax rate)) Firm…
Q: Rank the following risky investment projects based on stochastic dominance. Project P Payoff…
A: Risk is defined as an uncertain outcome that differs from the expected outcome. It includes the…
Q: Schnussenberg Corporation's stock just paid a dividend of $1.60 a share (i.e., D0 = $1.60). The…
A: Current price of stock may be calculated using dividend discount method using following formula…
Q: List the business, technological, and organizational challenges that were addressed throughout the…
A: Management is the administration of a company, a non-profit organisation, or a government agency.…
Q: Calls options were traded on exchanges before puts. During the period of time when calls were traded…
A: Put-Call Parity: Put-call parity refers to the price correlation among a European call option and a…
Q: 4. If at the beginning of the 6th year the nominal rate drops to 12% compounded quarterly, what is…
A: Mortgage amortization refers to a schedule which is prepared to shows the periodic loan payments,…
Q: The net present value if the equipment were purchased is?
A: Net present value (NPV) of an alternative/project refers to the variance between the initial…
Q: A firm will start paying dividends 3 years from now and thereafter that will be expected to grow 5.3…
A: The intrinsic value of the stock can be found using the dividend discount model. As per DDM, the…
Q: Identify which anti-hostile takeover strategies are being described. [S1] A merger will only push…
A: When a prospective merger or acquisition needs to be thwarted then there are several anti-hostile…
Q: A solid waste disposal company borrowed money at 10% pe and other equipment needed at the…
A: The principal amount would the present value of single payment done after 2 years considering the…
Q: The table below contains the covariance matrix of stock returns and the market. Assume that the…
A: Risk is the possibility of loss for an organization and risk management is one of the most important…
Q: Reported annual total returns (%) of Vanguard FTSE Emerging Markets Index Fund ETF Shares for the…
A: Compound annual growth Annual growth rate is calculated as shown below. Annual growth rate=Ending…
Q: Data from The Economist BigMac index from January 2022 shows that the local price of a Big Mac in…
A: According to purchase power parity the exchange rate and purchase power should be related and this…
Q: ABC Corporation has a developing market for its product. Good financial risk management will allow…
A: Financial risk management is the protection of the financial interests of a company from any…
Q: ABC has a return of 400,000 which is 2% more than its required return. If the cost of capital is…
A: Shareholder Equity: It can be described as the residual claim of the owners of the company after…
Q: The invoice date for a bill is April 14 with the terms 2/15 ROG. If the goods were received on June…
A: Discount date: April 29 Due Date: May 19
Q: Changes in yield-to-maturity (YTM) produce market price risk and reinvestment risk. A __________ in…
A: The answer is option B. decrease/increase. A decrease in yield-to-maturity (YTM) increases a bond’s…
Q: Anderson Manufacturing Co., a small fabricator of plastics, needs to purchase an extrusion molding…
A: As per the information provided: Principal (P) = $140,000 n = 5 g = 9% or 0.09 i = 13% or 0.13
Q: If the interest rate is 12% compounded annually, approximately how many years will it take the…
A: In the problem we need future value triple as compare to present value therefore to calculate the…
Q: Revenue from the sale of ergonomic hand tools was P300,000 in years 1 through 4 and P465,000 in…
A: Sales; Year 1-4 = P300,000 Year 5-9 = P465,000 Interest rate = 0.10 Period = 9 years Present value…
Q: The equivalent annual-pay yield-to-maturity (YTM) for a 5.28% coupon monthly-pay bond is closest to…
A: Annual yield to maturity = 0.0528 Monthly yield to maturity (YTM) = 0.0044 (i.e. 0.0528 / 12) Number…
Q: 1) If you deposit $4,000 today in a bank account and the interest is compounded annually at 10…
A: Time value of money (TVM) refers to the method used to measure the amount of money at different…
Q: The real risk-free rate of interest, r*, is 3%. Inflation is expected to be 4% this year, 5 percent…
A: Bonds: It is an agreement by a borrower to pay a a money lender their principal and usually…
Q: A friend of yours tells you she holds an American call option that is very deep- in-the-money. She…
A: Deep in the money is an option where the exercise price is significantly lower than the current…
Q: ou just won the NY State Lottery. The Grand Prize is $275 million. Lottery officials give you a…
A: Upfront payment $ 27,50,00,000.00 Periodic Payment 15000000 Time Period 25 Interest…
Q: The real risk-free rate of interest, r*, is 3%. Inflation is expected to be 4% this year, 5 percent…
A: Yield on 10 years bond will be the risk free rate,inflation and maturity risk premium.
- Arona would like to receive $15,820 each year for the next 5 years, starting today. Then she hopes to receive $17,500 per year at the beginning of the 6th year for an additional 5 years. In total 10 payments. Assume an interest rate of 6%.
- Find the present value of this cash flow stream.
2. Find the
please use formula or any necessary diagram. please provide steps and explanation
Step by step
Solved in 2 steps with 3 images
- You will receive the following cash flows at the end of each year for the next 5 years. Year 1: $1,500; Year 2: $3,500; Year 3: $9,500; Year 4: $0; Year 5: $1,500. You can invest the money at an annual return rate of 8%. What is the present value of this stream of future cash flows? Group of answer choices $12,325.07 $12,951.86 $13,033.53 $13,988.00You are told you will receive a cash flow stream that gives you $2,150 at time 1, $2,750 at time 3, $3,350 at time 4, and an annuity cash flow of $80 for the subsequent 8 periods. The present value (at time 0) of this cash flow stream is $8,550. The discount rate is 9.3 percent annually. What is the value of the missing cash flow at time 2? Show all your steps.You expect to receive two cash flows: $41,000 paid in 5 years and $61,500 paid in 10 years. You'll put the money into a savings account with an annual interest rate of 8%. What is the future value of the combined cash flows, in 15 years? Please Introduction and explanation without plagiarism please and use math tools plZ
- Arona would like to receive $15,820 each year for the next 5 years, starting today. Then she hopes to receive $17,500 per year at the beginning of the 6th year for an additional 5 years. In total 10 payments. Assume an interest rate of 6%. Find the present value of this cash flow stream. Find the future value of this cash flow stream.You have been offered the opportunity to invest in a project that will pay$3,509per year at the end of years one through three and$6,911per year at the end of years four and five. These cash flows will be placed in a saving account that pays11.95percent per year. What is the future value of this cash flow pattern at the end of year five? Round the answer to two decimal places. Your Answer:(IRR calculation) Your investment advisor has offered you an investment that will provide you with a single cash flow of $10,000 at the end of 20 years if you make an annual payment of $200 per year in the interim period. Specifically, the annual payments begin immediately and extend through the end of year 19. You then receive the $10,000 at the end of year 20. Find the internal rate of retum on this investment This investment's internal rate of retum is%. (Round to two decimal places) C
- A civil engineer wants to deposit an amount P now such that she can withdraw an equal annual amount of A1 = P2000 per year for the first 5 years, starting 1 year after the deposit, and a different annual withdrawal of A2 = P3000 per year for the following 3 years. How would the cash flow diagram appear if i = 6.5% per year?a) What’s the rate of return you would earn if you paid $1,500 for a perpetuity thatpays $105 per year? b) At a rate of 8%, what is the present value of the following cash flow stream?$0 atTime 0; $100 at the end of Year 1; $300 at the end of Year 2; $0 at the end of Year 3;and $500 at the end of Year 4?Attach a complete solution. Draw the cash flow diagram.Suppose that P 4500 is deposited each year into a bank account that pays 8% interest compounded quarterly. How much would be accumulated in his fund by the end of the 4th year? The first payment occurs at time zero (now).
- Using a present value table, your calculator, or a computer program present value function, answer the following questions: See Table 6-4 and Table 6-5 (Use the appropriate factor by clicking on the appropriate Table links.)Required: What is the present value of nine annual cash payments of $2,000, to be paid at the end of each year using an interest rate of 4%? What is the present value of $20,000 to be paid at the end of 22 years, using an interest rate of 16%? How much cash must be deposited in a savings account as a single amount in order to accumulate $300,000 at the end of 10 years, assuming that the account will earn 8% interest? How much cash must be deposited in a savings account (as a single amount) in order to accumulate $50,000 at the end of 12 years, assuming that the account will earn 12% interest? Assume that a machine was purchased for $55,900. Cash of $15,300 was paid, and a four-year, 12% note payable was signed for the balance. Prepare the horizontal model and…Solve the following question with complete solution and include cash flow diagram in handwritten form:How much money should be deposited each year for 5 years starting 1 year from today, if you wish to withdraw $9889 each year for 9 years, beginning at the end of 16 years? Let i=12% per year. (Round off to 2 decimal places)A loan for P50,000 is to be paid in 3 years at the amount of P65,000. What is the effective rate of money? Draw the cash flow diagramwith your solution.