What is present value of this stream of cash flows

Assignment Help Financial Management
Reference no: EM131562443

Wally, president of Wally's Burgers, is considering franchising. He has a potential franchise agreement that would allow him to receive 16 end-of-year payments starting one year from now. The first two payments would be $26,000 and $23,000 in one and two years respectively, and then $18,000 per year after that for 14 years. If Wally requires a return of 10.5%, what is the present value of this stream of cash flows?

What is the present value of this stream of cash flows? $ (Round to the nearest cent.)

Reference no: EM131562443

Questions Cloud

How much principal have you paid over the first ten years : The loan is amortized over 25 years. How much principal have you paid over the first 10 years?
What is return on your portfolio : If the price of Merck increases to $45 and the price of Yahoo decreases to $22 per share, what is the return on your portfolio?
How much money you will need at retirement : You are trying to decide how much money you will need at retirement. How much will you need at retirement to fund these planned withdrawal?
Risk-free security-what is the beta of your portfolio : The expected return on the risk-free security is 3.50%. You construct a portfolio to match your friend's return. What is the beta of your portfolio?
What is present value of this stream of cash flows : Wally, president of Wally's Burgers, is considering franchising. What is the present value of this stream of cash flows?
Digital image processing machine three years : Duluth purchased a digital image processing machine three years ago at a cost of $50,000.
Accessories supplier makes deliveries every tuesday : Jill's Truck Stop sells specialty seat cushions that are designed to keep drivers awake on the road. Her accessories supplier makes deliveries every Tuesday,
What is return on your portfolio : If the price of Merck increases to $45 and the price of Yahoo decreases to $22 per share, what is the return on your portfolio?
Using two period binomial model : Using a two period binomial model, what is the price of an American put option with a strike price of $41?

Reviews

Write a Review

Financial Management Questions & Answers

  Tax-paying corporation interested in liquidity

A tax-paying corporation interested in liquidity would prefer to invest short-term money in:

  Should the estate tax be abolished forever

Should the estate tax be abolished forever, permitting families of successful, wealthy individuals to retain their wealth without government interference?

  Explain how options can be used to manage risk

Explain how options can be used to manage risk. Provide an example using a call option and another example using a put option.

  What is the price per share of equity under plan

Silverton Co. is comparing two different capital structures. What is the price per share of equity under Plan I?

  Create state transition diagram

Create a state transition diagram that describes typical customer states and how they change based on specific actions and events.

  Process of calculating present value of future cash flow

The process of calculating the present value of a future cash flow is called:

  Prepared to make monthly payments

You're prepared to make monthly payments of $300, How many payments will you have made when your account balance reaches $18,514?

  What must expected return on this stock be

What must the expected return on this stock be?

  Use to compute the value of his saving at that time

Which time value of money concept should he use to compute the value of his saving at that time?

  The policy action of government

The policy action of government, central bank in particular in dealing with financial crisis and economic slowdown in recent years

  Consumer protection regulation

Dodd Frank and consumer protection regulation was introduced after the 2007-8 financial crises.

  Expected return on the portfolio

Portfolio expected return: You own a portfolio that has $4,600 invested in Stock Y and $5,200 invested in Stock Z. What is the expected return on the portfolio if the expected returns on these stocks are 9.75 percent and 16.50 percent?

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