What is the present value of this business opportunity

Assignment Help Financial Management
Reference no: EM131297451

If $12,000 is invested in a certain business at the start of the year, the investor will receive $3,600at the end of each of the next four years. What is the present value of this business opportunity if the interest rate is 44% per year?

Reference no: EM131297451

Questions Cloud

Effective cost of a loan : Effective Cost of A Loan: Business is good but you have ambitions to make it exceptional. In order for your dreams to come true you will need to borrow 5 million dollars. determine the effective cost and whether your project maximums are acceptable.
What is the current value of the stock at a discount rate : A stock is expected to pay dividends of $1.20 per share in year 1 and $1.35 per share in year 2. After that, the dividend is expected to increase by 2.5% annually. What is the current value of the stock at a discount rate of 14.5%?
What is the value of this exchange to? you : You are an international shrimp trader. A food producer in the Czech Republic offers to pay you 2.1 million Czech koruna today in exchange for a? year's supply of frozen shrimp. The cost of the shrimp from the Thai supplier in dollars is. The amount ..
What is the net present value of project : Suppose Corporation Z is considering investing in a new project of urban development. The cost of the project is $5000000 USD. Corporation Z expects that the non-incremental yearly cash flows from the project are $1000000 Millions of USD for the next..
What is the present value of this business opportunity : If $12,000 is invested in a certain business at the start of the year, the investor will receive $3,600at the end of each of the next four years. What is the present value of this business opportunity if the interest rate is 44% per year?
Ignore brokerage commissions and margin interest costs : Assume you bought 100 shares of DataPoint for $25 per share, and it is currently selling for $40 per share. Assume the stock evenually declines to $31. Ignore brokerage commissions and margin interest costs. Calculate your percentatge rate of return ..
Financial security that guarantees to pay : Angela is offered to buy a financial security that guarantees to pay $30 every 3 years. The annual interest rate is 9%. Calculate and explain in words all calculations for the following: How much would Angela pay for it today if the first payment wil..
Calculate the mean adjusted abnormal return : Which of the following are inconsistent with the semi-strong form of the efficient market hypothesis?  Suppose a security's mean return is 1.50%. On a particular day, the return on the market is 1.20% while the return on the security is 1.85%. Calcul..
Hedge the foreign currency value of the foreign asset : The basic approach to the use of currency futures is to hedge the foreign currency value of the foreign asset. To accomplish this, managers would sell short currencies in the amount of an asset’s value. buy long currencies in the amount of an asset’s..

Reviews

Write a Review

Financial Management Questions & Answers

  What is the profit or loss associated with copper

Landmark Coal operates a mine. During July, the company obtained 500 tons of ore, which yielded 250 pounds of gold and 62,500 pounds of copper. The joint cost related to the operation was $500,000. Gold sells for $325 per ounce and copper sells for $..

  Effective tax rate on your share of the corporations earning

You are a shareholder in a "C" corporation. This corporation earns $5 per share before taxes. After it has paid taxes, it will distribute the remainder of its earnings to you as a dividend. The dividend is income to you, so you will then pay taxes on..

  How do warrants-convertible bonds differ from call options

How do warrants and convertible bonds differ from call options? Why would a corporation issue warrants or convertible bonds?

  Stock split

JPix management is considering a stock split. JPix currently sells for $65 per share, and a 3-for-2 stock split is contemplated. What will be the company's stock price following the stock split assuming that the split has no effect on the total marke..

  Calculate the stock expected return and standard deviation

A stock's returns have the following distribution: Probability of this demand occurring Rate of Return if this demand occurres .1 (50%) .2 (5) .4 16 .2 25 .1 60 Calculate the stock's expected return, standard Deviation, and Coefficient of variation.

  Compute the value of Acme Common Stock

Suppose you have a $1,000 face value bond with 12 years to maturity, a coupon rate of 6% and a yield to maturity of 8%. If the bond makes semiannual payments, what is its price today? Compute the value of Acme Common Stock if the next dividend is exp..

  Calculate percent interest rate or effective cost of loan

The following are three one year "discount" loans that a bank might offer to the customer. Determine the amount of interest the bank would make on each loan and indicate the amont of net proceeds that the bank would pay our on each loan. On which loa..

  What is the current market price of bonds-current yield

Jackson Corporation's bonds have 5 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon interest rate is 12%. The bonds have a yield to maturity of 8%. What is the current market price of these bon..

  Certainty to investors in the floating rate note

Consider the auction of 2-year Floating Rate Notes in April 2014. As we saw in class, the notes are priced at par and investors receive face value at maturity. Coupon interest payments are indexed to the 13-week T-bill and are made quarterly (July, O..

  Lead to shorter cash conversion cycle

Other things held constant, which of the following would lead to a shorter cash conversion cycle?

  How is it possible to embed political risk insurance

How is it possible to embed political risk insurance in a capital budgeting analysis?

  Superior method of evaluating the cash flows from project

Describe how NPV is calculated, and describe the information this measure provides about a sequence of cash flows. What is the NPV criterion decision rule? Why is NPV considered a superior method of evaluating the cash flows from a project?

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