User Account

All Pages

A project that provides a constant annual cash flow

Assignment Help Financial Management
Reference no: EM13806180

A project that provides a constant annual cash flow of $1,930 for eight years costs $7,700 today. Calculate the NPV at an 8% discount rate. Note: NPV = sum of the present values of all (positive and negative) cash flows

A. $3,391.01

B. $2,370.52

C. $1,930.00

D. -$5,770.00

Reference no: EM13806180

Questions Cloud

Statements regarding the efficient market hypothesis : Which of the following statements regarding the efficient market hypothesis (EMH) is incorrect?
Incorrect given the treasury quotes : Which statement is INCORRECT given the following Treasury quotes? The dealer is willing to sell this bond to you for 150.750% of par.
Correct valuation equation for this bond : Dizzy Corporation’s 10-year semi annual bond bearing a coupon rate of 12% is currently selling for $950. Given this information, which of the following is the correct valuation equation for this bond? Note: PVIFA(r,t) = [{1-1/(1+r)t}/r] and PVIF(r,t)..
Statements regarding bond trading is incorrect : Which of the following statements regarding bond trading is INCORRECT? The long-term bonds issued by the U.S. government are called Treasury Bills.
A project that provides a constant annual cash flow : A project that provides a constant annual cash flow of $1,930 for eight years costs $7,700 today. Calculate the NPV at an 8% discount rate. Note: NPV = sum of the present values of all (positive and negative) cash flows
Statements regarding capital budgeting criteria : Which of the following statements regarding capital budgeting criteria is INCORRECT?
Project is expected to create value for its owners : Which of the following indicates that a project is expected to create value for its owners?
Investors believe that dividends will grow-current price : McIver, Inc. currently pays a $2 annual dividend. Investors believe that dividends will grow at 20% next year, 12% for the following year, and 6% annually thereafter. The required return is 10%. What is the current price of the stock?
Required return on equity investments : What would you pay for a share of ABC Corporation stock today if the next dividend will be $3 per share, your required return on equity investments is 15%, and the stock is expected to be worth $90 one year from now? Hint: PV = FV/(1+r)t

Reviews

Write a Review

Financial Management Questions & Answers

  Prepare a monthly cash flow for a company

Prepare a monthly cash flow for a company with the given information, and need to comment on the current performance and the future sales increment.

  Calculate present value of cash inflow

Whats the firm's cash conversion cycle and assume that all of the firm's sales are on credit. If the firm has annual sales of $4 million, what's the accounts receivable investment

  What is the effect on break-even level of revenues

What is the effect on break-even level of revenues for each dollar of increase in fixed costs plus depreciation for a firm with 70% variable costs?

  How much would you be willing to pay for this security

Suppose that one year has elapsed, you have received the first payment of $600, and the market interset rate is still 5 percent. How much would another investor be willing to pay for your security?

  Capital asset pricing model asserts that the expected return

The Capital Asset Pricing Model asserts that the expected return

  Most recent dividend per share paid on the stock

Teder Corporation stock currently sells for $30 per share. The market requires a 13.5 percent return on the firm's stock. If the company maintains a constant 8 percent growth rate in dividends, the most recent dividend per share paid on the stock was..

  Calculate the present value of an annuity

Calculate the present value of an annuity (as a series of uniform payments) (use Table 7). 2a. Beth has won the $40 million lottery!! She will receive $2million per year for 20 years. If Beth could invest the money at 7% interest what is the $20 mill..

  What is the projects payback period

A project has an initial cost of $59,675, expected net cash inflows of $12,000 per year for 9 years, and a cost of capital of 12%. What is the project's payback period? Round your answer to two decimal places

  Time value of money

Time Value of Money calculations always use compound interest - You must adjust the interest rate and the number of periods to be consistent with compounding periods.

  What are the transaction costs in index arbitrage activity

Compute the ‘fair’ value of the two nearest to expiration futures contracts on the S&P500 Index (SPX) using SPX as the underlying asset. What are the transaction costs in index arbitrage activity?

  Explain what does the market believe will be the stock price

The dividend is expected to grow at some constant rate g, the stock currently sells for $33 a share. Assuming the market is in equilibrium, what does the market believe will be the stock price at the end of 3 years (i.e.,what is P^3)?

  Calculate kevins return-what is the current yield on bond

Kevin purchases 100 shares of Coca- Cola at $42.40 a share in January. The company paid a dividend of .25 per share and he sells the stock after a year for $43.00 a share. Calculate Kevin's return. A technology company has total liabilities of $60,00..

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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