Explain why the npv of a relatively long-term project

Assignment Help Finance Basics
Reference no: EM13483150

Explain why the NPV of a relatively long-term project, defined as one for which a high percentage of its cash flows are expected in the distant future, is more sensitive to changes in the cost of capital than is the NPV of a short-term project.

Reference no: EM13483150

Questions Cloud

Flip company purchased equipment on january 1 2011 for : flip company purchased equipment on january 1 2011 for 90000. it is estimated that the equipment will have a 5000
In what sense is a reinvestment rate assumption embodied : in what sense is a reinvestment rate assumption embodied in the npv irr and mirr methods? what is the assumed
Yengling companys payroll for the year is 593150 of this : yengling companys payroll for the year is 593150. of this amount 211630 is for wages paid in excess of 7000 to each
Produces memory enhancement kits for fax machines sales : produces memory enhancement kits for fax machines. sales have been very erratic with some months showing a profit and
Explain why the npv of a relatively long-term project : explain why the npv of a relatively long-term project defined as one for which a high percentage of its cash flows are
You have been entrusted with monies for investment given : you have been entrusted with monies for investment. given current conditions on global markets what combination of
Metacorp limited plans to raise new capital for its project : metacorp limited plans to raise new capital for its project in queensland. you are employed to estimate its cost of
A coupon rate of 9 percent paid annually the tax rate is 40 : suppose a company will issue new 20-year debt with a par value of 1000 and a coupon rate of 9 percent paid annually.
Derive the functional relationship between the no arbitrage : let ckdenote a european vanilla call option with strike price k. assume that all options are identical except for

Reviews

Write a Review

Finance Basics Questions & Answers

  Compute rate of return on the portfolio

Use the information in the previous problem and consider a portfolio with weights of .60 in stocks and .40 in bonds.

  What are the pros and cons of setting a target rating

Some companies' debt-equity targets are expressed not as a debt ratio, but as a target debt rating on a firm's outstanding bonds. What are the pros and cons of setting a target rating, rather than a target ratio? Please explain both and provide ad..

  What is the yield to maturity for an swh corporation bond

What is the yield to maturity for an SWH Corporation bond on January 1, 2010 if the market price of the bond on that date is $950?

  Accrual accounting requires estimates of future outcomesfor

accrual accounting requires estimates of future outcomes.for example the reserve for bad debts is a forecast of the

  For many years japanese financial companies including

requirementsfor many years japanese financial companies including insurance companies banded assets together as a

  How much would payables increase

Data on Mertz Co., for the most recent year are shown below, along with the payables deferral period (PDP) for the firms against which it benchmarks. The firm's new CFO believes that the company could delay payments enough to increase its PDP ..

  What is the value of rolen preferred stock

What is the value of Rolen's preferred stock? Round your answer to the nearest cent.

  Computation of yield to maturity

Computation of yield to maturity and The face value is $1,000 and the current market price is $1,020.50

  What is the financial break-even quantity

A project has the following estimated data: price = $52 per unit; variable costs = $34 per unit; fixed costs = $23,500; required return = 12 percent; initial investment = $30,000; life = three years.

  What is the firm income tax liability

ABC company had a taxable income of $588,645 from operations after all operating costs but before interest charges of $58,760, dividends received of $56,349, dividends paid of $10,000, and income taxes. What is the firm's income tax liability?

  Calculate the average beta

A mutual fund manager has a $200,000,000 portfolio with a beta is 1.2. Suppose that the risk-free rate is 6% and that the market risk premium is also 6%.

  Calculate rate of return

Suppose six months ago the US Treasury yield curve was flat at a rate of 4 percent per year suppose semi-annual coupon payments and semi-annual compounding and you bought a thirty year US Treasury bond.

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