What is an opportunity cost rate

Assignment Help Finance Basics
Reference no: EM13268965

What is an opportunity cost rate? How is this rate used in discounted cash flow analysis, and where is it shown on a time line? Is the opportunity rate a single number that is used all situations?

Would you rather have a savings account that pays 5% interest compounded semiannually or one that pays 5% interest compounded daily? Explain

If you deposit $10,000 in a bank account that pays 10% interest annually, how much will be in your account after 5 years?

What is the present value of a security that will pay $5,000 in 20 years if securities of equal risk pay 7% annually?

What is the future value of a 7%, 5-year ordinary annuity that pays $300 each year? If thiswere an annuity due, what would its future value be?

An investment will pay $100 at the end of each of the next 3 years, $200 at the end of Year 4, $300 at the end of Year 5, and $500 at the end of Year 6. If other investments of equal risk earn 8% annually, what is this investment's present value? Its future value?

You want to buy a car, and a local bank will lend you $20,000. The loan would be fully amortized over 5 years (60 months), and the nominal interest rate would be 12%, with interest paid monthly. What is the monthly loan payment? What is the loan's EFF%?

 

Reference no: EM13268965

Questions Cloud

What kind of business regulations would you impose : what kind of business law system would you adopt -a civil law system or a common law system, and why? 2) What kind of business regulations would you impose?
Find the magnitude of gravitational acceleration on planet : After landing on an unfamiliar planet, a space explorer constructs a simple pendulum of length 46.0cm, What is the magnitude of the gravitational acceleration on this planet
Determine the lsb signal and its bandwidth : If the LSB signal is transmitted through a channel that only introduces a 0.3 ms delay, and the oscillator at the LSB receiver produces a local carrier 2 cos(2 pi fct), determine the receiver output signal y(t).
In order to establish exclusive representation : In order to establish exclusive representation, a union needs to win: If a group of employees is represented by a union and another union that has a better track record also wants to represent those workers, the employees:
What is an opportunity cost rate : What is the future value of a 7%, 5-year ordinary annuity that pays $300 each year? If thiswere an annuity due, what would its future value be?
Customer-centric organization : How is a customer-centric organization different from one that is product focused? How does customer centricity impact the areas of finance, human resources, information technology, marketing, research and development, operations, and sales?
How many coulombs pass a given point in the circuit : The electric current in a microprocessor circuit is 0.360 uA. How many coulombs pass a given point in the circuit in 2.30 ms
Which strategy works best if a bidding war erupts : If you were Smith's financial advisor, which strategy would you advise he establish? Or would you argue that he not speculate on this takeover?
Determine what is the range of decimal numbers : What is the range of decimal numbers that can be represented in 16-bit register assuming the following (a) Numbers are unsigned (b) Numbers are signed (in signed-magnitude representation)

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the stock expected total return for the coming year

If last dividend = $4.3, g = 8.4%, and P0 = $75, what is the stock's expected total return for the coming year?

  Calculate the value of security

Calculate the value of security and Value the financial instrument below using excel functions

  Explain evaluation of investment proposal by profitability

Explain Evaluation of Investment proposal through Profitability Index and Rank the proposals in terms of preference using the project profitability index

  Calculate the expected return and the expected risk

The extent of the benefits of portfolio diversification depends on the correlation between returns of securities. Briefly discuss the relationship between the portfolio risk and coefficient of correlation.

  Fisher effect-us and euro inflation and currency rates

Assume that the U.S and the Euro nominal interest rate are equal. Subsequently, the U.S. nominal rate decreases while the Euro nominal interest rate remains stable.

  International accounting standards board

Explain the International Accounting Standards Board (IASB) and its purpose. What countries are subject to IASB? How is the IASB the same or different from FASB?

  What is the present value of the new drug

Once the patent expires, other pharmaeutical companies will be able to produce the same drug and competiton will likely drive profits to zero. What is the present value of the new drug if the interest rate is 10% per year?

  Article analysis by using macroeconommic indices

Conduct an analysis of a recent article and provide their evaluation and outcome expectations in a written paper of 1500-2500 words that discusses:

  Compute patent amortization expenses

Sony Company purchased a patent for $180,000 on September 1, 2006. It had a useful life of ten years. On January 1, 2008, ELO spent $44,000 to successfully defend the patent in a lawsuit.

  Balance the alignment of organizational goals

How can you balance the alignment of organizational goals with compliance of legal requirements when implementing a financial plan?

  Calculates loss from the way debtor calculates gain

In a loan modification scenario, determine under what circumstances would a debtor record a gain? Estimate its key difference in the way the creditor calculates its loss from the way the debtor calculates its gain?

  Calculate value of beta

Alpha Corporation and Beta Corporation are identical in every way except their capital structures. Alpha Company, an all-equity firm, has 5,000 shares of stock outstanding, currently worth $20 per share.

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