Compute the present value of deposit

Assignment Help Financial Management
Reference no: EM131021507

Compute the present value of a $3,700 deposit in year 3 and another $3,200 deposit at the end of year 5 if interest rates are 8 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.)

Reference no: EM131021507

Questions Cloud

Too often the numbers look good but feel bad : A consultant commented that “too often the numbers look good but feel bad”. This comment often stems from an estimation error common to capital budgeting proposals that relate to future cash flows. Three reasons for this error often exist. Discuss wh..
End of year balance for net operating working capital : The 2013 income statement for Lou's Shoes shows that depreciation expense is $2 million, EBIT is $5 million, EBT is $3 million, and the tax rate is 40 percent. At the beginning of the year, the balance of gross fixed assets was $16 million and net op..
What is the standard deviation of this land investment : You are trying to decide whether to invest some idle cash in undeveloped land. You intend to hold the investment for five years before selling out and sailing the Caribbean. You have made the following estimates of the value of the land five years fr..
Industries will pay a regular dividend : JJ Industries will pay a regular dividend of $0.75 per share for each of the next four years. At the end of four years, the company will also pay out a liquidating dividend. If the discount rate is 12 percent, and the current share price is $75, what..
Compute the present value of deposit : Compute the present value of a $3,700 deposit in year 3 and another $3,200 deposit at the end of year 5 if interest rates are 8 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.)
Coupon bond pays interest annually : A 6% coupon bond pays interest annually, matures in 7 years, and has a principal of $1000.  Assuming a discount rate of 8.5%, what is the price of this bond? What is the actual % price change given the yield change in (e)?
Calculate the value of the treasury note : Assume that a $1,000,000 par value, semiannual coupon U.S. Treasury note with five years to maturity (YTM) has a coupon rate of 3%. the yield to maturity of the bond is 9.90%. Using this information and ignoring the other costs involved, calculate th..
Compute the incremental income after taxes : Kevin’s Wholesale is considering extending trade credit to some customers previously considered poor risks. Sales would increase by $350,000 if credit is extended to these new customers. Of the new accounts receivable generated, 15 % will be uncollec..
What are the prices of these bonds today : Bond X is a premium bond making annual payments. The bond has a coupon rate of 8.5 percent, a YTM of 6.5 percent, and has 18 years to maturity. Bond Y is a discount bond making annual payments. What are the prices of these bonds today? What do you ex..

Reviews

Write a Review

Financial Management Questions & Answers

  Which dividends are expected to grow at rate

Huang Company's last dividend was $1.25. The dividend growth rate is expected to be constant at 30% for 3 years, after which dividends are expected to grow at a rate of 6% forever. If the firm's required return (r) is 11%, what is its current stock p..

  Firm is considering two manually exclusive projects

Suppose a firm is considering two manually exclusive projects. One has a life of 6 years and the other a life of 10 years. Would the failure to employ some type of replacement chain analysis bias an NPV analysis against one of the projects? Explain

  The appropriate cost of capital

Hathaway, Inc., a resort company, is refurbishing one of its hotels at a cost of $7,424,321. Management expects that this will lead to additional cash flows of $1,768,100 for the next six years. What is the IRR of this project? If the appropriate cos..

  Discuss the criminal liability of david

Discuss the criminal liability of David and Newtown Motor Co Ltd. What defences may be available to David and Newtown Motor Co Ltd if they are prosecuted? What advice would you give Newtown Motor Co Ltd to help it avoid prosecution in the future?

  What is the value of preferred stock

Several years ago, Rolen Riders issued preferred stock with a stated annual dividend of 8% of its $100 par value. Preferred stock of this type currently yields 7%. Assume dividends are paid annually. What is the value of Rolen's preferred stock?

  Evaluating board performance

Utilizing workshop readings, the workshop devotional, and your own online research, write a three-page paper, not including your title page and reference page, answering the following questions from the perspective of the Chairman of the Board at a f..

  Considering sale of new sound board used in recording studio

Rolston Music Company is considering the sale of a new sound board used in recording studios. The new board would sell for $25,600, and the company expects to sell 1,410 per year. The company currently sells 1,910 units of its existing model per year..

  Find the present value of this annuity

A three-year continuous annuity pays a total of $100 during the first year, $400 during the second year, and $1,000 during the third year. Within each year, the payments are made continuously and evenly throughout the year. The effective annual inter..

  What is the annual cash required and the cash received

The company could issue $2,500,000 of long-term bonds, due in 5 years with a stated rate of interest, paid semi annually, of 4%. The market rate for similar debt is 6%. What is the annual cash required and the cash received

  Cash break-even quantity and financial break-even quantity

A project has the following estimated data: price = $54 per unit; variable costs = $29.16 per unit; fixed costs = $6,100; required return = 16 percent; initial investment = $13,000; life = three years. Ignoring the effect of taxes, the accounting bre..

  The nominal return on your investment

You want to have $6 million in real dollars in an account when you retire in 40 years. The nominal return on your investment is 9 percent and the inflation rate is 5.4 percent. What real amount must you deposit each year to achieve your goal?

  Differentiate between profit maximization and wealth maximiz

Differentiate between the three financial statements with which managers should be familiar. How are they linked?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd