What is the value of this annuity nine years and seven years

Assignment Help Financial Management
Reference no: EM131185106

A 9-year annuity of 18 $8,800 semiannual payments will begin 10.5 years from now, with the first payment coming 11 years from now. If the discount rate is 12 percent compounded semiannually, what is the value of this annuity nine years and seven years from now?

Reference no: EM131185106

Questions Cloud

What decision should be made using NPV : An investment project has the following cash flows: CF0 = -1,000,000; C01 – C08 = 200,000 each. If the required rate of return is 12%, what decision should be made using NPV? How would the IRR decision rule be used for this project, and what decision..
Abandonment options are rarely seen in the real world : In general, the more uncertainty there is about market conditions, the more attractive it may be to wait before making an investment. In general, the greater the strategic advantages of being the first competitor to enter a given market, the more att..
Make the company less likely to proceed with the investment : Weisbach Electronics is considering investing in India. Which of the following factors would make the company less likely to proceed with the investment?
What is the price per share of the company stock : Ward Corp. is expected to have an EBIT of $2,700,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $181,000, $117,000, and $131,000, respectively. What is the price per share of the company's st..
What is the value of this annuity nine years and seven years : A 9-year annuity of 18 $8,800 semiannual payments will begin 10.5 years from now, with the first payment coming 11 years from now. If the discount rate is 12 percent compounded semiannually, what is the value of this annuity nine years and seven year..
Financial models have a variety of useful applications : Financial models have a variety of useful applications. Users of financial models must possess a firm grasp of the input risk and limitations of the model in order to use these tools apparently. Share a financial model with the class that you feel co..
Capital budgeting criteria-mutually exclusive projects : Capital budgeting criteria: Mutually Exclusive Projects Project S costs $15,000, and its expected cash flow would be $4,500 per year for 5 years. Mutually Exclusive Project L costs $37,500, and its expected cash flows would be $11,100 per year for 5 ..
Capital budgeting-Calculate NPV with and without mitigation : Capital budgeting: ethical considerations A mining company is considering a new project. Because the mine has received a permit, the project would be legal; but it would cause significant harm to a nearby river. The firm could spend an additional $10..
Towards paying interest : Mariah borrowed $22,000 for 25 years at 9.4 percent compounded monthly. What is Mariah's monthly payment? How much of payment 231 will go towards paying interest? How much of payment 180 will go towards paying off principal?What will the ending balan..

Reviews

Write a Review

Financial Management Questions & Answers

  Earning an annual rate of return

Warren Buffet has been earning an annual rate of return of 20.5% since he started his investing company. Assume that Londo Mollari put a lump-sum $25,000 under Warren Buffet’s management since 1970, how much money would he have by Year 2010? FV = $43..

  Net present value method-internal rate of return method

Define and then discuss the advantages and disadvantages of the following evaluation criteria; (1) the payback method; (2) the Net Present Value method; and (3) the Internal Rate of Return method. In your answer be clear to state the decision rule fo..

  What is projected dividend for coming year-rapid growth

Frey Corp. is experiencing rapid growth. Dividends are expected to grow at 26 percent per year during the next three years, 16 percent over the following year, and then 9 percent per year indefinitely. The required return on this stock is 11 percent,..

  Calculate the internal rate of return

Calculate the Internal Rate of Return (IRR) for an investment in a 400-MW power plant with an expected life of 30 years. This plant costs 1200$/kW to build and has a heat rate of 9800 Btu/kWh.

  What is the maximum initial cost the company

Scanlin, Inc., is considering a project that will result in initial aftertax cash savings of $1.76 million at the end of the first year, and these savings will grow at a rate of 3 percent per year indefinitely. What is the maximum initial cost the co..

  What constant amount will you be able to withdraw each year

You are 27, and decide to save $7500 each year (first deposit a year from now) in an account that pays 10% interest per year. You will make your last deposit 38 years from now when you retire at age 65. During retirement, you plan to withdraw funds f..

  Explain the above four methods of forecasting exchange rates

In forecasting exchange rates, many practitioners use either the Interest Rate Parity, Purchase Price Parity, Asset Approach, or the Balance of Payments Approach. Please define and explain the above four methods of forecasting exchange rates, includi..

  What term is this loan being paid

A pottery factory purchases a continuous belt conveyor kiln for $68,000. A 6.3% APR loan with monthly payments is taken out to purchase the kiln. If the monthly payments are $765.22, over what term is this loan being paid?

  Supplier is offering your firm a cash discount

A supplier is offering your firm a cash discount of 2 percent if purchases are paid for within ten days; otherwise, the bill is due at the end of sixty days. Would you recommend borrowing from a bank at an 18 percent annual interest rate to take adva..

  Firm needs to plow back its earnings to fuel growth

Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next nine years because the firm needs to plow back its earnings to fuel growth. The company will pay a $12 per share dividend in 10 years and will..

  Same stock having the same exercise price and maturity

From a geometric viewpoint, how is the position diagram for a put option related to the diagram of a call option on the same stock having the same exercise price and maturity?

  What tax rate is required to meet budgetary demands

The total assessed property value in Frame town is $77,000,500. Budget planners have determined that $5,140,900 will required providing all government services next year. What tax rate is required to meet budgetary demands? (Express your answer as a ..

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