How much more is nancys cash flow worth

Assignment Help Financial Management
Reference no: EM13890074

Mary is going to receive a 30-year annuity of $10,500. Nancy is going to receive perpetuity of $10,500. If the appropriate interest rate is 7 percent, how much more is Nancy’s cash flow worth?

Reference no: EM13890074

Questions Cloud

Assume that you just won the state lottery : Assume that you just won the state lottery. Your prize can be taken either in the form of $40,000 at the end of each of the next 25 years (i.e., $1 million over 25 years) or as a lump sum of $500,000 paid immediately. If you expect to be able to earn..
Plans to retirement : Assume that your father is now 50 years old, that he plans to retire in 10 years, and that he expects to live for 25 years after he retires - that is, until he is 85. He wants his first retirement payment to have the same purchasing power at the time..
How sensitive is the npv to changes in the quantity sold : Conch Republic Electronics is a midsized electronics manufacturer located in Key West, Florida. The company president is Shelly Couts, who inherited the company.  The company originally repaired radios and other household appliances when it was found..
Ceases to withdraw funds from the account : Your uncle has $300,000 invested at 7.5%, and he now wants to retire. He wants to withdraw $35,000 at the end of each year, beginning at the end of this year. He also wants to have $25,000 left to give you when he ceases to withdraw funds from the ac..
How much more is nancys cash flow worth : Mary is going to receive a 30-year annuity of $10,500. Nancy is going to receive perpetuity of $10,500. If the appropriate interest rate is 7 percent, how much more is Nancy’s cash flow worth?
What will the beta of the equity in the firm : Safe Corp which owns and operates grocery stores across the US, currently has $ 50 million in debt and $ 100 million in Equity outstanding. Its stock has a beta of 1.2. Its stock has a beta of 1.2. Debt-Equity ratio to 8. Debt-Equity ratio to 8. What..
What interest rate will you earn on the bond : You have purchased a U.S. Treasury bond for $3,000. No payments will be made until the bond matures 10 years from now, at which time it will be redeemed for $5,000. What interest rate will you earn on the bond?
Would you argue that the cost of equity should be zero : Would you argue that the cost of equity should be zero? After all, we can determine our own dividend policy. The amount of earnings we choose to keep in the business (i.e., retained earnings after paying dividends) is "free", right?
Prepare a daily contribution margin income statement : Prepare a daily contribution margin income statement based on the following assumptions: My Cookie Company makes only one kind of cookie and sells it for $1.00 per unit.

Reviews

Write a Review

 

Financial Management Questions & Answers

  What is the expected return on a portfolio composed

Security F has an expected return of 10.9% and a standard deviation of 24% per year. Security G has an expected return of 18.1% and a standard deviation of 63% per year.

  An asset has had an arithmetic return

An asset has had an arithmetic return of 10.2 percent and a geometric return of 8.2 percent over the last 88 years. What return would you estimate for this asset over the next 9 years? 24 years? 40 years?

  Linear regression

The Electrocomp Corporation manufactures two electrical products: air conditioners and large fans. The assembly process for each is similar in that both require a certain amount of wiring and drilling. Each air conditioner takes 3 hours of wiring and..

  Cultural dimensions-human resource management

Describe the five cultural dimensions identified by Geert Hofstede as they apply to human resource management.

  How many years will you make payments on the loan

You borrowed $700 at 5% compounded quarterly. Your payments are $150 at the end of each year. How many years will you make payments on the loan?

  What is the current bond price

Aloha Inc. has 6 percent coupon bonds on the market that have 9 years left to maturity. If the YTM on these bonds is 7.6 percent, what is the current bond price?

  Fixed assets will remain at their current level

Sambonoza Enterprises projects its sales next year to be $5 million and expects to earn 5 percent of that amount after taxes. The firm is currently in the process of projecting its financing needs and has made the following assumptions (projections):..

  Provide an example of a health care capital expenditure why

provide an example of a health care capital expenditure. why is the capital expenditure budgeting process important?

  What will bling diamonds cash dividend be in seven years

Four years ago, Bling Diamond, Inc., paid a dividend of $1.95 per share. Bling paid a dividend of $2.37 per share yesterday. Dividends will grow over the next five years at the same rate they grew over the last four years. Thereafter, dividends will ..

  Customers is delinquent on his accounts payable balance

One of your customers is delinquent on his accounts payable balance. You’ve mutually agreed to a repayment schedule of $680 per month. You will charge 1.08 percent per month interest on the overdue balance.

  Indicate which asset exhibits the greatest credit risk

In each pair below, indicate which asset exhibits the greatest credit risk. Describe why. a. Commercial loan to a Fortune 500 company or a loan to a corner grocery store b. Commercial loans to two businesses in the same industry; one is collateralize..

  What is the amount of net capital spending for the year

The financial statement of Edgewater marina reflect depreciation expense of $21600 and interest expenses of $27900 for the year .the current assets increased by$31800 and the net fixed assets increased by $28600. what is the amount of net capital spe..

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