Set of cash flows if the relevant discount rate

Assignment Help Financial Management
Reference no: EM13883219

Consider the following cash flows: Year Cash Flow 0 −$31,000 1 17,300 2 15,200 3 10,600 Requirement 1: What is the profitability index for the above set of cash flows if the relevant discount rate is 10 percent? (Do not round intermediate calculations. Round your answer to 3 decimal places (e.g., 32.161).) Profitability index Requirement 2: What is the profitability index if the discount rate is 15 percent? (Do not round intermediate calculations. Round your answer to 3 decimal places (e.g.,32.161).) Profitability index Requirement 3: What is the profitability index if the discount rate is 22 percent? (Do not round intermediate calculations. Round your answer to 3 decimal places (e.g.,32.161).) Profitability index

Reference no: EM13883219

Questions Cloud

Free cash flow during the just-ended year : Mooradian Corporation’s free cash flow during the just-ended year (t = 0) was $150 million, and its FCF is expected to grow at a constant rate of 5.0% in the future. If the weighted average cost of capital is 12.5%, what is the firm’s total corporate..
Discuss the risks facing these institutions within context : Banks and other depository institutions make loans, invest in government securities, buy and sell federal funds, and accept deposits with a wide spectrum of maturities and with many payable on demand. Briefly discuss the risks facing these institutio..
Explain how depository intermediaries : What are the economic functions that financial intermediaries perform that benefit society? Be sure to explain how depository intermediaries, like banks, differ from other financial institutions such as investment banking firms or securities brokerag..
Established pattern of increasing its dividends : The common stock of Auto Deliveries sells for $26.96 a share. The stock is expected to pay $1.90 per share next year when the annual dividend is distributed. Auto Deliveries has established a pattern of increasing its dividends by 4.7 percent annuall..
Set of cash flows if the relevant discount rate : Consider the following cash flows: Year Cash Flow 0 −$31,000 1 17,300 2 15,200 3 10,600 Requirement 1: What is the profitability index for the above set of cash flows if the relevant discount rate is 10 percent?
Calculate your portfolios new beta : Your retirement fund consists of a $7,500 investment in each of 20 different common stocks. The portfolio's beta is 2.15. Now, suppose you sell one of the stocks with a beta of 1.0 for $7,500 and use the proceeds to buy another stock whose beta is 1...
Mortgage payments are treated as an ordinary annuity : You are planning to buy a house appraised for $350,000 and finance it through a mortgage of $250,000. You would then have a loan-to-value ratio of 0.714, safely below the cutoff by your lender of 0.80. What is the amount that you will pay per month i..
What is the required return on the market : Assume that the risk-free rate is 4.5% and that the market risk premium is 8%. What is the required rate of return on a stock with a beta of 0.8? What is the required return on the market?
Calculate the sustainable growth rate of the company : Johnson Products earned $3.10 per share last year and it paid out $.75 dividend. The company’s ROE is 16%. Calculate the dividend payout ratio; Calculate the sustainable growth rate of the company.

Reviews

Write a Review

Financial Management Questions & Answers

  Assume that the company uses absorption-variable costing

Ida Sidha Karya Company is a family-owned company located in the village of Gianyar on the island of Bali in Indonesia. The company produces a handcrafted Balinese musical instrument called a gamelan that is similar to a xylophone. Assume that the co..

  Describe the concept of zero-base budgeting

Explain the concept of management control and how budgeting is used as part of it - Describe the concept of zero-base budgeting.

  Given outcome is its chance of occurring

The ___ of a given outcome is its chance of occurring.

  Company originally repaired radios and household appliances

Conch Republic Electronics is a midsized electronics manufacturer located in Key West, Florida. The company president is Shelly Couts, who inherited the company. The company originally repaired radios and other household appliances when it was founde..

  Repudiation released her from her duty to perform

Moore contracted in writ- ing to sell her 2012 Hyundai Santa Fe to Hammer for $16,500. Moore agreed to deliver the car on Wednesday, and Hammer promised to pay the $16,500 on the following Friday. Moore contended that Hammer’s repudiation released he..

  Conditional sale contract requires two payments

A conditional sale contract requires two payments three and six months after the date of the contract. Each payment consists of $1,890 principal plus interest at 12.5% on $1,890 from the date of the contract. One month into the contract, what price w..

  Described as indirect finance

Which of the following cannot be described as indirect finance? A bond denominated in a $5000 coupon bond with a coupon rate of 5% has a coupon payment of ___

  Carlson machine shop is considering a four-year project to

carlson machine shop is considering a four-year project to improve its production efficiency by purchasing a new

  Correct about the early exercise of american options

Which of the following statements is correct about the early exercise of American options?

  Self employed certified public accountant

On December 31, 2009, Cathy Chen, a self employed certified public accountant (CPA), completed her first full year in business. During the year, she billed $360,000 for her accounting services. She had two employees: a bookkeeper and a clerical assis..

  Present value of your windfall if appropriate discount rate

You have just received notification that you have won the $3.5 million first prize in the Centennial Lottery. However, the prize will be awarded on your 100th birthday (assuming you're around to collect), 64 years from now. What is the present value ..

  How to compute the yield and current yield

How to compute the Yield and Current Yield. Also, please explain the concept of Yield Spread and why this bond has a 106 basis point spread. For the first part of this question,

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