How much is the investment worth in todays terms

Assignment Help Financial Management
Reference no: EM131014924

1. An investment offers the following cash flows: $100 one year from now, $150 two years from now, $150 in 3 years, $900 in 4 years, and $600 in 5 years. If the relevant interest rate is 8% per year (an APR, with interest compounded annually), how much is the investment worth in today's terms?

2. An investment offers the following cash flows: $650 today, $750 one year from now, $900 in 2 years, and $850 in 3 years. If the relevant interest rate is 4% per year (an APR, with interest compounded annually), what is the value of the investment 3 years from today (immediately after the cash flow at "year 3" occurs)?

3. You are taking out a car loan and will make payments of $350 each month (beginning one month from today), for a total of 60 monthly payments. If the interest rate on the loan is 1.20% (the effective monthly rate on this loan), how much are you borrowing to buy the car?

4. You will deposit $550 each year into an investment account that earns 9% interest (an APR, with interest compounded annually). Your first deposit will be exactly one year from today, and you'll make a total of 10 deposits. How much will be in your account 10 years from today?  

Reference no: EM131014924

Questions Cloud

Strategies in response to each identified planning need : Write at least one primary and one alternative recommendation from selected strategies in response to each identified planning need. More than one recommendation may be needed to address all of the planning needs. It is suggested that each recommenda..
What is the temperature of the final state : A diaphragm separates the two compartments. Each compartment has a volume of 1 L. Suddenly, the diaphragm ruptures. Use the vander Waals equation for any nonideal behavior. What is cv at the initial state?
Conduct a current health insurance situation analysis : Conduct a current health insurance situation analysis for the Bedos. Be sure to assess the following: a. The after-tax costs of their current plans compared to purchasing an individual policy. b. The use of a tax-advantaged account as a health insura..
The irs adjustment caused a tax deficiency to be assessed : The IRS adjustment caused a tax deficiency to be assessed for both the regular income tax and the AMT.
How much is the investment worth in todays terms : An investment offers the following cash flows: $100 one year from now, $150 two years from now, $150 in 3 years, $900 in 4 years, and $600 in 5 years. If the relevant interest rate is 8% per year (an APR, with interest compounded annually), how much ..
What is the profitability index for above set of cash flow : What is the profitability index for the above set of cash flows if the relevant discount rate is 8 percent?  What is the profitability index if the discount rate is 13 percent?
How much heat is transferred this process : The initial pressure is 10 bar, and the initial molar volume is 3 3 1023 m3/mol, and the final volume is 0.05 m3/mol. Take the temperature of the surroundings to be 298 K. Use the van der Waals equation of state and What is the initial temper..
Supplier offers to supply component at an annual payment : Betty's Home Décor is considering whether to produce a component in-house or whether to purchase it from a supplier. A supplier offers to supply the component at an annual payment of $120,000 over three years (payable at the beginning of years 2, 3, ..
How much work is done on the system : One mole of methane in a piston-cylinder assembly undergoes an adiabatic compression from an initial state 1 P1 5 0.5 bar, v1 5 0.05 m3/mol 2 to a final state 1 P2 5 10 bar, v2 5 3 3 1023 m3/mol 2 . Use the van der Waals equation of state for noni..

Reviews

Write a Review

Financial Management Questions & Answers

  What is the total cash flow for this project at time zero

A new project you are considering is expected to generate an operating cash flow of $45,620 and will initially free up $22,000 in net working capital. Purchases of fixed assets costing $68,800 will be required to start up the project. What is the tot..

  What is the remaining unpaid balance

Skylar Masterson borrowed $250,000 to buy her first home at an annual interest rate of 12 percent with monthly payments for 30 years. Ms. Masterson would like to pay off her loan ahead of schedule. What is the remaining unpaid balance when there are ..

  Principles of investment analysis-portfolio management

Study of Investment Analysis and Portfolio Management is a specialized area of study that is aimed at maximising return given a level of risk. The principles of Investment Analysis and Portfolio Management have broadly been applied by large corporate..

  How much will you receive on the next coupon date

You purchase 3,000 bonds with a par value of $1,000 for $980 each. The bonds have a coupon rate of 7.2 percent paid semi annually, and mature in 10 years. How much will you receive on the next coupon date? How much will you receive when the bonds mat..

  What is firm weighted-average cost of capital

What is a firm's weighted-average cost of capital if the stock has a beta of 1.45, Treasury bills yield 5%, and the market portfolio offers an expected return of 14%? In addition to equity, the firm finances 30% of its assets with debt that has a yie..

  What is the maximum initial cost the company

Scanlin, Inc., is considering a project that will result in initial aftertax cash savings of $1.77 million at the end of the first year, and these savings will grow at a rate of 1 percent per year indefinitely. What is the maximum initial cost the co..

  The cost of equity and flotation costs

Suppose a company will issue new 25-year debt with a par value of $1,000 and a coupon rate of 10%, paid annually. The tax rate is 35%. If the flotation cost is 5% of the issue proceeds, then what is the after-tax cost of debt? Disregard the tax shiel..

  What risks and opportunities do the three common strategies

you will explore how businesses react to changing economic times and the influence this has on productservice

  Suppose the returns on long-term government bonds

Suppose the returns on long-term government bonds are normally distributed. Assume long-term government bonds have a mean return of 6.3 percent and a standard deviation of 9 percent.

  What are the tax consequences for CFO

On 1 of January 2013 ABC Company announced Stock options for the CFO at the price of $25 a share - 1000 shares. The exercise time is from January 2013 till January 2015. These are NSO and he buys them on March 2014 when the marker price is $30 a shar..

  Explain how adjusted book value approach to valuing assets

Using AstraZeneca plc’s 2014 annual report and financial statements, explain how an adjusted book value approach to valuing assets and liabilities moves book value nearer to economic value. You are required to provide a written response which highlig..

  What is this project equivalent annual cost

A five-year project has an initial fixed asset investment of $270,000, an initial NWC investment of $22,000, and an annual OCF of −$21,000. The fixed asset is fully depreciated over the life of the project and has no salvage value. If the required re..

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