Determine the present value of the contract

Assignment Help Financial Management
Reference no: EM131524911

A contract agrees to pay a $ 40,000 signing bonus ( up front ). In each of years 1 thru and including 4, the contract will pay $ 60,000. In Year 5, the contract will pay $ 70,000. If the Opportunity Cost is 8%, please determine the Present Value of the contract.

Reference no: EM131524911

Questions Cloud

Planning to save up for a trip to europe in three years : Mighty Mike is planning to save up for a trip to Europe in three years.
Create a portfolio with an expected return : If your goal is to create a portfolio with an expected return of 11.3 percent, how much money will you invest in Stock X?
What is portfolio beta : The betas for these four stocks are 0.86, 1.19, 1.03, and 1.21, respectively. What is the portfolio beta?
What must the expected return on stock : A stock has a beta of 0.9, the expected return on the market is 13 percent, and the risk-free rate is 7.15 percent. What must the expected return on this stock
Determine the present value of the contract : determine the Present Value of the contract.
What is the portfolio weight for stock : What is the portfolio weight for stock A and stock B, respectively?
What is weighted average cost of capital : If all non-Debt financing costs 20%, what is the Weighted Average Cost of Capital (WACC) for Firm H ?
What impact does the impairment of goodwill : What impact does the impairment of goodwill have on Zarto Inc’s financial statements?
What is the stock price for each share of stock : Beyond Year 3, growth will level off at 2% per year indefinitely. What is the Stock Price for each share of Stock C ?

Reviews

Write a Review

Financial Management Questions & Answers

  Assumes reinvestment of intermediate free cash flows

NPV assumes reinvestment of intermediate free cash flows at the cost of capital, while IRR assumes reinvestment of intermediate free cash flows at the IRR. NPV is the most theoretically correct capital budgeting decision tool examined in the text.

  Bank with one-year maturity and fixed interest rate

Your grandmother asks for your help in choosing a certificate of deposit? (CD) from a bank with a? one-year maturity and a fixed interest rate. The first certificate of? deposit, CD? #1, pays3.45 percent APR compounded weeklyweekly?, while the second..

  Discounting models or non time value of money models

Which models have the greatest following, discounting models (like IRR and NPV) or non time value of money models (like payback and accounting rate of return)?

  Zero estimated salvage value on a straight-line basis

Mom’s Cookies, Inc., is considering the purchase of a new cookie oven. The original cost of the old oven was $44,000; it is now five years old, and it has a current market value of $19,500. The old oven is being depreciated over a 10-year life toward..

  Sales growth rate and price to earnings ratio

Besides the Gross Margin ratio, Sales growth rate and price to earnings ratio, are there others you would think important to The Apple Company? What are they and how are they important?

  What is the cross rate between francs and pounds

The exchange rate between the US dollar and the Swiss Franc is SF1.3=$1, and the exchange rate betweent he dollar and the British pound is BP1=$1.40. What is the cross rate between francs and pounds.

  Intrinsic value of the bonds

Bright Sun, Inc. sold an issue of 30-year $1,000 par value bonds to the public. The bonds had a 13.04 percent coupon rate and paid interest annually. It is now 19 years later. The current market rate of interest on the Bright Sun bonds is 11.22 perce..

  Which ratios would a banker be most interested in when

Which ratios would a banker be most interested in when considering whether to approve an application for a short-term business loan? Explain.

  Combined annual income

Dan and Mary Green are in their mid-30s and have two children, ages 8 and 5. They have combined annual income of $95,000 and own a house in joint tenancy with a market value of $310,000, on which they have a mortgage of $250,000.

  Standard deviation of the rate of return on this investment

A project has a 0.52 chance of doubling your investment in a year and a 0.48 chance of halving your investment in a year. What is the standard deviation of the rate of return on this investment?

  What is the expected capital gains yield

The next dividend payment by Halestorm, Inc., will be $1.84 per share. The dividends are anticipated to maintain a growth rate of 5 percent forever. The stock currently sells for $36 per share. What is the dividend yield? What is the expected capital..

  What is northerns cash conversion cycle

The company's days' sales in inventory was 49 days. What is Northern's cash conversion cycle?- What is Lilly's operating cycle?

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