Regarding the then-current dollar approach for investment

Assignment Help Financial Management

Reference no: EM132028849

1. Using the constant dollar approach, the before-tax present worth is equal to $100 for an investment. Which of the following statements is correct regarding the then-current dollar approach for the investment?

a) The constant dollar approach and the then-current dollar approach present worths will vary based on the inflation rate.

b) The then-current dollar approach will have a before-tax present worth greater than $100 for the investment.

c) The then-current dollar approach will have a before-tax present worth less than $100 for the investment.

d) The then-current dollar approach will have a before-tax present worth equal to $100 for the investment.

2. Global steel prices have a year-over-year inflationary rate increase of 13.4%. Tube Fab purchased $700,000 of a particular carbon steel during the year just ended right now, and they intend to purchase the same quantity at the end of each of the next 5 years. Tube Fab earns a real rate of 16% on their money.Determine the then-current amounts they will pay for steel at the end of each of the next 5 years.

a) Determine the then-current amounts they will pay for steel at the end of each of the next 5 years.

b) Determine the constant value amounts they will pay for steel at the end of each of the next 5 years.

c) Determine Tube Fab’s PW of expenditures over the next 5 years using then-current dollars.

d) Determine Tube Fab’s PW of expenditures over the next 5 years using constant-value dollars.

Reference no: EM132028849

Questions Cloud

Do you know where to get the funding : What types of sacrifices would you be willing to make to transform your idea? Do you know where to get the funding?

Determine the actual after-tax cash flows for each year : Determine the actual after-tax cash flows for each year from end of year 0 to end of year 12. Determine the PW of the after-tax cash flows.

What they look for definition of venture capitalist : Definition of an angel, when they invest, and what they look for Definition of a venture capitalist; and what is attractive to a venture capitalist.

Hunter neither issued nor retired any common stock : What was the book value per share at 12/31/2015, assuming that Hunter neither issued nor retired any common stock during 2015?

Regarding the then-current dollar approach for investment : Which of the following statements is correct regarding the then-current dollar approach for the investment?

Stock markets can affect the economy and business cycle : Explain how movements in the stock markets can affect the economy and the business cycle.

Company eps and pe ratio be under two different scenarios : What will the company’s EPS and PE ratio be under the two different scenarios?

What do you think ex-dividend price will be : Timsang, Inc., has declared a $7.00 per share dividend. What do you think the ex-dividend price will be?

Find an example of quarterly earnings announcement : Find an example of quarterly earnings announcement made by any company (provide link for the source of your information).

User Account

All Pages