### Calculation of net present value with given cash flow

Assignment Help Finance Basics
##### Reference no: EM1313234

Calculation of net present value with given cash flow and probability

A firm's weighted average cost of capital is 10% and has a \$4000 project with the following estimates of cash flows under three possible states of nature. The project can be liquidated in year 2 at a cost of \$400 in all three states of nature. Should the company undertake the project? If a real option exists, determine its value. Support your conclusion quantitatively.

#### Questions Cloud

 Expalining the axial musculature: : Which of following are true of axial musculature:It arises elsewhere, however inserts on the axial skeleton. It makes up 40 percent of the body musculature. Share of gdp is composed of consumption : Illustrate what share of GDP is composed of consumption. Illustrate what share of GDP is composed of investment. Evaluation of current price per share : Evaluation of Current price per share and Supernormal Growth Dividend What is the distance between town and john : Two crates, of mass 75.0 kg and 109 kg, are in contact and at rest on a horizontal surface. A 732 N force is exerted on the 75.0 kg crate. What is the force the each crate exerts on the other. Calculation of net present value with given cash flow : Calculation of net present value with given cash flow and probability and Should the company undertake the project Equilibrium wage is higher or lower than two : Do wages clear when the wage equals two. Do we know whether the equilibrium wage is higher or lower than two. Result of regression and estimating demand function : From the regression output, estimate the demand function when income is \$40,000 and price is \$2 per gallon. Explain the result in terms of R-square, T-test, F-statistic, and signs of each X variables. Find rex''s direct materials price variance : Compute the Variance analysis of direct Materials - Find Rex's direct materials price variance Posterior group of axial muscles : Which of the following is the most posterior group of axial muscles? Muscles of the shoulder girdle. Muscles of the head and neck. Muscles of the pelvic floor

### Write a Review

#### Is it true that an option can never sell for lessthan

is it true that an option can never sell for lessthan you can make by exercising the option

#### Computing tax incidences for seller and buyer

Compute deadweight loss from this \$1 per unit tax and how much tax revenue government will get from tax. In determining tax incidence burden, compute tax incidences for both seller and buyer and sketch graph.

#### The weighted average cost of capital

Assume perfect market conditions; that is, no taxes, transaction costs, information or bankruptcy costs, etc. Consider two firms U and L that are identical in every way but in the way they are financed.

#### Calculation of a proposal to buy a new milling machine

Calculation of a proposal to buy a new milling machine using NPV and What is the net cost of the machine for capital budgeting purposes

#### Calculating real rate using nominal rate and inflation rate

Assume nominal rate is 14.62% and inflation rate is 5.49%. Solve for the real rate.

#### Computational fluid dynamics

Question on  Computational Fluid Dynamics,    What do your simulations derive the drag coefficients to be? Explain any discrepancies as best as you can.

#### Calculation of expected return and beta

Calculation of expected return, beta, coefficient of variation, standard deviation and required rate of return

#### Computation of base case npv and abandonment option

Computation of Base Case NPV and abandonment option of a Project

#### Creating balance sheet using mark-to-market method

Applying the Mark-to-market method, what will Novi Company show on its balance sheet at the end of 2006 to reflect its investment in Troy Company?

#### Computation of future contract value

Computation of future contract value and what is the farmer's net proceeds when corn is sold

#### Computing the interest earned for next years

Computing the interest earned for next years wants to invest equally amounts at the end of each year

#### Subsidiary corporation as well as calculation of income

Sale of Machinery to Subsidiary Corporation as well as Calculation of Income in Acquired Company