Tell how you would decide whether to accept that offer

Assignment Help Finance Basics
Reference no: EM132468079

Assume your business is owed $10,000 by a customer, and the terms of the sale called for the customer to pay you two years from now. Your customer asks you if you would be interested in accepting $9,000 today in full settlement of the account instead of the $10,000 in two years. Tell how you would decide whether to accept that offer, and what factors and assumptions would you consider in making your decision. Give an example with calculations as part of your discussions.

Reference no: EM132468079

Questions Cloud

What is the most would pay for the annuity : You currently earn 9% on low-risk investments comparable to the retirement annuity. Ignoring taxes, what is the most you would pay for this annuity?
Discuss reasons why Apple may have not paid dividends : Discuss in detail the reasons why Apple may have not paid dividends over the past 17 years, and the reasons why it has now decided to do so
Performing a personality test for an employment position : Is there any value in performing a personality test for an employment position? If so why?
Was lia life ruined by cross-cultural misunderstandings : Write a 175- to 265-word response to the following: Was Lia's life ruined by cross-cultural misunderstandings? Explain your thoughts.
Tell how you would decide whether to accept that offer : Tell how you would decide whether to accept that offer, and what factors and assumptions would you consider in making your decision.
Why biological asset is non-current asset : Why biological asset is non-current asset. Explain whether grade vineyard and grade should be classified under biological asset and agricultural produce
What price will ibm trade after the ex-date : IBM, which stock currently trades at USD 100, makes a 3-for-2 stock split. At what price will IBM trade after the ex-date?
Present value of the cash flow : What is the value of $X in order for the present value of the cash flow to be 0? Assume your discount rate is 3% (Hint think algebra and perpetuities)
Advantage in compounding is exactly balanced by its fee : In other words, how much could UBS charge before its advantage in compounding is exactly balanced by its fee? Show and explain all supporting calculations!

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the expected price of the stock 10 years from now

A stock is expected to pay a $1.00 dividend per share. The growth rate is expected to be 4%. If investors demand 10% on this stock, what is the expected price of the stock 10 years from now?

  Present value of growing perpetuity

The product promises an initial payment of $20,000 at the end of this year and subsequent payments that will thereafter grow at a rate of 0.02 annually. If you use a discount rate of 0.09 for investment products, what is the present value of this ..

  Computing the company cost of equity capital

David Ortiz Motors has a target capital structure of 30% debt and 70% equity. The yield to maturity on the company's outstanding bonds is 8%.

  Discuss proposition i and ii

Discuss MM's later models (1963) in which they relaxed the no-tax assumption and added corporate taxes. Discuss Proposition I and II.

  Fill in the missing information in the following table

Fill in the missing information in the following table. Assume that Portfolio AB is 30 percent invested in StockA.

  Why does the concept of market efficiency with respect to

why does the concept of market efficiency with respect to information have no necessary relation to the quality of

  Nikki gs corporations 10-year bonds are currently yielding

nikki gs corporations 10-year bonds are currently yielding a return of 7.00 percent. the expected inflation premium is

  Determine the beta for your portfolio

You have invested in stocks J and M. From the following information, determine the beta for your portfolio.

  At what price should the logos corporation sell these bonds

To price these bonds competitively with other bonds of equal risk, it is determined that they should yield 9 percent, compounded annually. At what price should the Logos Corporation sell these bonds?

  Why is it important for company abc to know its wacc

Find the Weighted Average Cost of Capital? If Company ABC wanted to lower its WACC, what could it do? Why is it important for Company ABC to know its WACC?

  Total cost based on last months cost data

What would be the total cost based on last months cost data?

  Difference between the loss associated with striving

Describe Taguchi's thinking about the difference between the loss associated with striving to be "between specifications" versus trying to achieve the target.

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