Discount rate and the time increase the future value

Assignment Help Financial Management
Reference no: EM13944478

Other things equal, as the discount rate and the time increase, the future value? remains constant, also increase, decrease, becomes negative, ow will vary but the direction of the change remains unknown

Reference no: EM13944478

Questions Cloud

Book value of equity is equal to market value of equity : GTB has a 25% tax rate and has $85.80 million in assets, currently financed entirely with equity. Equity is worth $6 per share, and book value of equity is equal to market value of equity. What will be the level of the expected EPS if GTB switches to..
What is the equipments after-tax salvage value : Kennedy Air Services is now in the final year of a project. The equipment originally cost $35 million, of which 75% has been depreciated. Kennedy can sell the used equipment today for $8.75 million, and its tax rate is 30%. What is the equipment's af..
What is the NPV of the most profitable project : Mulroney Corp. is considering two mutually exclusive projects. Both require an initial investment of $10,000 at t = 0. Project X has an expected life of 2 years with after-tax cash inflows of $6,000 and $7,800 at the end of Years 1 and 2, respectivel..
About a firms cost of debt : Which of the following is generally true about a firm's cost of debt?
Discount rate and the time increase the future value : Other things equal, as the discount rate and the time increase, the future value? remains constant, also increase, decrease, becomes negative, ow will vary but the direction of the change remains unknown
Calculate the standard deviation for the portfolio : The stock of two companies will have the following returns for different states of the economy in the coming year: State of the economy Probability ABC XYZ Risk-free Good .60 23% 15% 5% Poor .40 5% 7% 5% Form a portfolio with 25 percent in ABC, 50 pe..
What are the firms current capital structure weights : Suppose that papa bell inc.'s equity is currently selling for $61 per share, with 4.6 million shares outstanding. Assume the firm also has 23,000 bond outstanding, and they are selling at 94% of par. What are the firm's current capital structure weig..
Sells to retail auto supply stores on credit terms : Mace Auto Parts Company sells to retail auto supply stores on credit terms of "net 60". Annual credit sales are $300 million (spread evenly throughout the year) and its accounts average 28 days overdue. The firm's variable cost ratio is 0.75 (i.e., v..
Use value to save : If Maria’s option value to save the Bald Eagle is $43, her willingness to pay is $359, and the non-use value is $88, what would be Maria’s use value to save the Bald Eagle?

Reviews

Write a Review

Financial Management Questions & Answers

  What are the financial statements presented in the report

What are the financial statements presented in the report and how many disclosures are in the report and what was the net income of the company? Explain the revenues and the expenses components.

  Describe variable costs and identify an example

Describe variable costs and identify an example. Contrast the effects of changes in the activity level on the total variable costs and the variable cost per unit.

  Array machine will enable hospital to perform autoimmunity

An equipment acquisition proposal was being considered by a large health care organization. The array machine will enable the hospital to perform autoimmunity tests (for immunoglobulin’s G, M, and A and complements C3 and C4) in-house rather than sen..

  What is the intrinsic value

Coca-Cola currently has a stock price of $53.75. It also has eight options available with the following Expiration Date, Strike Price (Exercise Price), and Option Price. For Example, you can buy a Feb 55 Call for $3.6 (or you could sell it for $3.6)...

  What is capital intensity ratio

ABC had assets of $15 million last year; sales were $18 million; liabilities plus accruals that increased spontaneously with sales was 8% of assets; net income was $275,000 of which $120,000 was paid out in the form of dividends. What is ABC's capita..

  Cost of debt capital is lower than cost of equity capital

In general, the cost of debt capital is lower than the cost of equity capital. For this reason, it might be expected that firms with high debt ratios would have a lower weighted average cost of capital. Explain at least one reason why this is not the..

  What is balance of current liabilities on firm balance sheet

The assets of Dallas & Associates consist entirely of current assets and net plant and equipment. The firm has total assets of $2.4 million and net plant and equipment equals $2.1 million. It has notes payable of $150,000, long-term debt of $755,000,..

  What is the variance of the returns on stock

If the economy booms, RTF, Inc. stock is expected to return 13 percent. If the economy goes into a recessionary period, then RTF is expected to only return 5 percent. The probability of a boom is 83 percent while the probability of a recession is 17 ..

  Compute the interest paid in the eighth year

Consider a 12-year loan with annual payments at 5%. If the loan amount is $250,000, compute the interest paid in the eighth year.

  Calculate baysides financial ratios

Bayside Memorial Hospital's financial statements are presented in Tables 13.1, 13.2, and 13.3 in the textbook. Calculate Bayside's financial ratios for 2013. Assume that Bayside had $1 million in lease payments and $1.4 million in debt principal repa..

  Implemented the lockbox system

Hardin-Gehr Corporation (HGC) began operations 5 years ago as a small firm serving customers in the Detroit area. However, its reputation and market area grew quickly. Today HGC has customers all over the United States. How much free cash would HGC g..

  Question 1 describe vernons product life-cycle theory of

question 1. describe vernons product life-cycle theory of fdi. what are the strength and weakness of the

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