User Account

All Pages

Now assume that the discount rate changes across periods

Assignment Help Managerial Economics
Reference no: EM13975239

Consider a project with net benefits NBt in period t: NB0 = 30, NB1 = 15, NB2 = 25, NB3 = 3.

a. Find the net present value if the discount rate is r = 6%, 8% and 10%.

b. Now assume that the discount rate changes across periods. In specific, the discount rate for period 1 (discounting from period 1 to period 0) is r1 = 10%, the discount rate for period 2 (discounting from period 2 to period 1) is r2 = 8% and the discount rate for period 3 (discounting from period 3 to period 2) is r3 = 6%. Find the net present value.

Reference no: EM13975239

Questions Cloud

Implications of all of with respect to nationwide branchings : Suppose interest rates on residential mortgages of equal risk are 5.5% in California and 7% in New York. Could this differential persist? What forces might tend to equalize rates? Would differentials in borrowing costs of business of equal risk locat..
How would you rate dinsmore hotel : Case - A Comment on Management Attitude. How would you rate Dinsmore's hotel? What evidence would you provide to support your position
What is an aggressive financing strategy : What is an aggressive financing strategy? What are the components and under what circumstances would you use either model?
Take advantage of a long term investment opportunity : Let's say that a company has actually reformed relatively well long term and an investor has reformed research and has made a decision to invest in a dividend paying organization. However, instead of aying out an increased dividend amount giving inve..
Now assume that the discount rate changes across periods : Now assume that the discount rate changes across periods. In specific, the discount rate for period 1 (discounting from period 1 to period 0) is r1 = 10%, the discount rate for period 2 (discounting from period 2 to period 1) is r2 = 8% and the disco..
Increase the efficiency of staff monitoring of residents. : Summarize the lesson(s) this facility's administrator and staff should learn from this case. Next, suggest one (1) change to this facility's human resources policies in order to increase the efficiency of staff monitoring of residents. Provide a r..
Some of the most important risks associated with bonds : Are there any instances in which companies should not pay dividends? How do dividends impact the value of a share of stock? What are some of the most important risks associated with bonds?
Household saving rates in the united states : Construct a scatter diagram using the household saving rates in the United States and Germany as the two variables. It doesn't really matter which one you con- sider to be the independent variable. In the years when U.S. saving rates were hig..
What is the book value per share and earnings per share : Val's Volleyball Supply's market-to-book ratio is currently 3.36 times and PE ratio is 5.56 times. If Val's Volleyball Supply's common stock is currently selling at $10.05 per share, what is the book value per share and earnings per share?

Reviews

Write a Review

Managerial Economics Questions & Answers

  Principal forces acting upon the supply and demand

Analyze the principal forces acting upon the supply and demand the company is experiencing, using any financial information you feel is relevant.

  How much of total demand do the follower firms supply

TAlchem (L) is the price leader in the polyglue market. All 10 othe manufacturers (followers) (F) firms sell polyglue at the same price as Alchem

  Having more customers is better than having fewer customers

To be successful, you have to be cheaper.  Take an SBA (Small Business Administration) course, and thy will tell you that if your only competitive point is to be cheaper, don’t bother starting your business.

  Production function and factors of production

Production function and Factors of production and Production Possibilities frontier

  Economic theory to business management

Managerial economics is the discipline which deals with application of "economic theory to business management" Discuss

  What are some individual and organizational

What are some individual and organizational recommendations to improve the experiences, employment, and status of African-Americans in organizations?

  What the marginal costs and marginal benefits of decision

You would like to know what the marginal costs and marginal benefits of this decision are. That should depend on factors like:

  Price change on total cost, total revenue and total profit

Wyandotte Chemical Corporation sells many chemicals to automobile industry. Wyandotte currently sells 30,000 gallons of polyol per year at an average price of $15 per gallon.

  Discuss how alternative view of human behavior might suggest

Employees in a similar plant in southern California are observed to be lazy and unproductive. Discuss how alternative views of human behavior and motivation might suggest different explanations for this observed behavior.

  What do you think might be causing the given behavior

They are also uncooperative with one another. What do you think might be causing this behavior, and what might you do to improve the situation?

  Price elasticity assumed by the consultant

Evaluate the proposal. Be sure to include in your answer the price elasticity assumed by the consultant, as well as the published elasticity estimate.

  Inverse demand and supply functions

Q1. Consider a market characterized by the following inverse demand and supply functions:

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd