Calculate the npv if the discount rate is 10 percent

Assignment Help Financial Econometrics
Reference no: EM13333596

A project that costs $3,600 to install will provide annual cash flows of $860 for each of the next 6 years.

A. Calculate the NPV if the discount rate is 10%?
B. Is this project worth pursuing?
C. How high can the discount rate be before you would reject the project?

Reference no: EM13333596

Questions Cloud

Travel times on the bus and subway are independent : Assume Zack values his time at $0.25 per minute. He can purchase an MBTA report each morning that tells what the actual travel time will be for both the bus and the subway. How much is he willing to pay for this information?
State structural formulas for the alkoxide ion and the alkyl : Draw structural formulas for the alkoxide ion and the alkyl(aryl)bromide that may be used in a Williamson synthesis of the ether shown. ch3-0-chch3 with a ch3 off of the second carbon from the right Draw both structures in the single sketchpad.
Provide a description of relationships between organisation : Discuss how this organisation has responded to the introduction of Information Systems (IS) into their business paradigms. Highlight the advantages of IS, the disadvantages and the resultant shortfalls that must be addressed in this organisation.
How would one find the potential energy of the springs : if two springs are attatched to one another and a mass is added at the bottom, how would one find the potential energy of the springs
Calculate the npv if the discount rate is 10 percent : A project that costs $3,600 to install will provide annual cash flows of $860 for each of the next 6 years. A. Calculate the NPV if the discount rate is 10% B. Is this project worth pursuing
What is the magnitude of your acceleration : While at the county fair, you decide to ride the Ferris wheel. Having eaten too many candy apples and elephant ears, you find the motion somewhat unpleasant. What is the magnitude of your acceleration
Explain the temperature and pressure of the system : When electrical current of unknown magnitude is run through the device for 4.00min , 13.1mL of water-saturated H2(g) is collected. The temperature and pressure of the system are 25C and 715torr. A. How many moles of hydrogen gas are produced
What is the percentage change in the price of the bonds : Bond J has a coupon rate of 4 percent. Bond S has a coupon rate of 14 percent. Both bonds have 10 years to maturity, make semiannual payments, and have a YTM of 8 percent.
Name the complex ion present when the compounds dissolved : Name the complex ion present when the followng compounds are dissolved in water and determine the number of moles of each species present if one mole of the compound is dissolved

Reviews

Write a Review

Financial Econometrics Questions & Answers

  What is the contribution margin per procedure point

Assume that a specialty group has the following cost structure and that the group expects to perform 7,500 procedures in the coming year: Fixed costs $500,000 Variable Cost per procedure $25

  What is the total value of this drilling option for 1 year

A company has the opportunity to bid for drilling rights for one year on a tract of land. The cost of extracting the oil is $18 per barrel, and the current (and expected future) price of oil is $16 per barrel.

  At what constant rate is the stock expected to grow

Rosa Company stock price is $58.88, and recently paid a $2.00 dividend. This dividend is expected to grow by 25% for the next 3 years, then grow forever at a constant rate, g: and r = 12%.

  What factors should take into consideration when evaluating

What factors should I take into consideration when evaluating a companies capital budgeting decisions based on thier annual report. Please explain which factors to look at and what to consider.

  Compute the duration for bond c and rank the bonds

Compute the duration for bond C, and rank the bonds on the basis of their price volatility. The current rate of interest is 8 percent, so the prices of bonds A and B are $1,000 and $1,268 respectively.

  Discuss the factual rationale behind the nations decision

Discuss the factual rationale behind this nation's decision to go to war with Afghanistan and Iraq after the 9/11 attacks as well as the response from the international community

  Estimate worst-case operational risk loss of certain type

Suppose that there is a 1% probability that operational risk losses of a certain type exceed $10 million. Use the power law to estimate the 99.97% worst-case operational risk loss when the parameter

  Why rise in level of interest rates adversely affect market

Why does a rise in the level of interest rates adversely affect the market value of both assets and leabilities

  How much will mark have in the account after 14 years

Mark deposits $800 each month in a retirement plan paying 10% compounded monthly. How much will he have in the account after 14 years

  What if interest rates suddenly fall by 2 percent instead

My employer has a 9 percent bond outstanding. Both bonds have 13 years to maturity, make semiannual interest payments, and have a YTM of 6 percent.

  Determine how much will have in 30 years compounded monthly

You plan to retire in 30 years and decide to save $10,000 per year. If the interest rate is 6% compounded monthly, how much will you have in 30 years. Assume that each deposit is made at the end of every year.

  What is the expected value of a prize in the game

iN A GAME OF CHANCE, the probability of winning a 50 dollar is 40 percent, and the probability of losing a 50 dollar prize is 60 percent, what is the expected value of a prize in the game

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