What is the current value of this stream of payments

Assignment Help Financial Management
Reference no: EM131306517

Suppose you receive annuity due of $500 per year for 10 years. The interest rate is 7% compounded annually. What is the current value of this stream of payments?

Reference no: EM131306517

Questions Cloud

Create a report that includes a discussion and analysis : Now create a report that includes a discussion and analysis regarding how such a supplier makes such a determination in order to maximize the firm's profits.
Bonds had a yield-to-maturity : Assume that you bought a newly-issued Zero coupon bond and a newly-issued coupon bond with a 5.5% coupon on October 10, 2010 when both bonds had a yield-to-maturity of 5.5%. The par value of each bond is $1000. What was the price of each bond when yo..
Explain if changes in values reflect trade feedback efforts : Search the Internet for export and import data since 2008 for developed nations. By how much have the values of these exports and imports increased or decreased since 2008? Explain if the changes in the values reflect the trade feedback effect.
Describe moment captured in leonardo last supper painting : Describe the moment captured in Leonardo's Last Supper painting, and discuss the reasons why disciples are shown on the same side of the table. Describe the most well-known techniques that Leonardo used to give more realism to the painting.
What is the current value of this stream of payments : Suppose you receive annuity due of $500 per year for 10 years. The interest rate is 7% compounded annually. What is the current value of this stream of payments?
Suppose that federal government is running a budget surplus : Aspen Co. issues 10-year, zero coupon bonds that yield 5 percent. What is the implicit interest income for the first year for these bonds if the face value is $1,000? Suppose that the Federal government is running a budget surplus. What would be its ..
Explain advantages and disadvantages of the choice you made : Describe the advantages and disadvantages of the choice you made. Describe the advantages and disadvantages inherent in the option you did not choose.
What is effective rate of return on your investment : Suppose you pay $100,000 for an investment that will pay you $4,000 every six months. You can reinvest the 4,000 at an APR of 5%. Assuming in 10 years you will get back the $100,000, what is the EAR (effective rate of return) on your investment?
Using the fcf model-what is the value of the firm : You are going to value Lauryn’s Doll Co. using the FCF model. After consulting various sources, you find that Lauryn has a reported equity beta of 1.5, a debt-to-equity ratio of .4, and a tax rate of 30 percent. Assume a risk-free rate of 5 percent a..

Reviews

Write a Review

Financial Management Questions & Answers

  British pound sterling

Based on Citibank's direct American quotes of $1.8419-28 in New York, at what price may you purchase US Dollars in London based on European terms? State your answer in GBP (British pound sterling) to four decimal points (e.g. 0.5020).

  Analyzing the projects net present value

Assume a healthcare organization is analyzing a capital investment project with greater risk than that of the organization’s average project. Which of the following cost of capital alternatives would be most appropriate for analyzing the project’s ne..

  Create a daily bar chart for mrk

Create a daily bar chart for MRK for August 2005-September 2005. - Use this chart to describe the Dead Cat Bounce.

  Large public corporations with subsidiaries throughout world

Both Berkley and Oakley are large public corporations with subsidiaries throughout the world. Berkley uses a centralized approach and makes most of the decisions for its subsidiaries. Oakley uses a decentralized approach and its subsidiaries make man..

  Target capital structure-cost of common equity

Percy Motors has a target capital structure of 30% debt and 70% common equity, with no preferred stock. The yield to maturity on the company's outstanding bonds is 10%, and its tax rate is 40%. Percy's CFO estimates that the company's WACC is 13.60%...

  Started to work as the hr person

You have just started to work as the HR person at a carpet store. The owner has called you into her office and asked you to come up with a system of pay raises for all the employees. She has given you a budget of $15,000 for these raises. There are 2..

  Sales growth rate and price-to-earnings ratio

Consider the cell phone giant company Apples. Apple has 3 Key Financial Ratios: gross margin, sales growth rate, and price-to-earnings (P/E) ratio. How could you use Apple’s example in the real world and how this can help run a business?

  Same exercise price and expiration date as call option

The current price of a stock is $33 and the annual risk-free rate is 6%. A call option with a strike price of $32 and with one year until expiration has a current value of $6.56. What is the value of a put option written on the stock with the same ex..

  Explain what is meant by open position and open interest

Explain what is meant by open position/open interest. Why does the open position/open interest usually decline during the month preceding the delivery month? On a particular day, there are 2000 trades in a particular futures contract. Of the 2000 tra..

  Determine the annual worth using an interest rate

A bridge has a first cost of $3,200,000. The bridge will require a one-time major repair in year 10 at a cost of $25,000. The AOC is $75,000 per year for years 1 -4 and $ 100,000 per year in year 5 and afterward forever. The bridge is expected to las..

  Compute the indirect quote for the rand rupee and yen

What does the evidence in Table 2.3 indicate about the expected future value of the Euro relative to the dollar? Compute the indirect quote for the rand, rupee, and yen as of March 9, 2010. (Refer to Table 2.1.)

  Amount to be invested today

Roy Gross is considering an investment that pays 6.10 percent, compounded annually. How much will he have to invest today so that the investment will be worth $28,000 in six years?

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