What is the expected net present value

Assignment Help Finance Basics
Reference no: EM13294094

Debby's Dance Studios is considering the purchase of new sound equipment that will enhance the popularity of its aerobics dancing. The equipment will cost $24,300. Debby is not sure how many members the new equipment will attract, but she estimates that her increased annual cash flows for each of the next five years will have the following probability distribution. Debby's cost of capital is 10 percent.

Cash flow Probability
$ 3,980 .4
5,280 .2
8,140 .2
10,600 .2

(a) What is the expected value of the cash flow? (Omit the "tiny_mce_markerquot; sign in your response.)

Expected cash flow $

(b) What is the expected net present value? Use Appendix D. (Round "PV Factor" to 3 decimal places, intermediate and final answers to the nearest dollar amount. Negative amount should be indicated by a minus sign. Omit the "tiny_mce_markerquot; sign in your response.)

 

Reference no: EM13294094

Questions Cloud

The guidelines prescribed by elkeles and phillips : Students will interview a CLO (or research the role of a CLO.) Be prepared to compare and contrast how he or she is building value for his or her organization to the guidelines prescribed by Elkeles and Phillips.
Explain what is the molarity of a 1:1 hno3- water solution : Assuming that concentrated HNO3 (70% HNO3) is 16M, what is the molarity of a 1:1 HNO3:Water solution
What percentage of the power would be dissipated : You are given the job of evaluating potential power line systems. What percentage of the power would be dissipated in the low-voltage power line
Find impulse response sequence y due to impulse sequence : Given the following difference equation with the input-output relationship of a certain initially relaxed system (all initialconditions are zero),  y(n) - 0.7 y(n-1) + 0.1y(n-2) = x(n) + x(n-1)
What is the expected net present value : What is the expected value of the cash flow? (Omit the "tiny_mce_markerquot; sign in your response.)
Explain what is the change in internal energy of the system : A system receives 729 J of heat and delivers 4,104 J of work to its surroundings. What is the change in internal energy of the system (in J)
Develop budgeted overhead costing rate for each cost center : (a) Develop the March budget allowances for each cost center. (b) Develop the budgeted overhead costing rate for each cost center and a blanket overhead costing rate for the entire company. Can Anyone please help me with this? Thank You in Advance..
Design and wire a circuit that uses a dpdt relay : design and wire a circuit that uses a dpdt relayto apply opposite polarity voltages to the rotor of a small dcmotor upon the throwing of a spst "direction" switch. there should also be a separate on/off switch in order to stop the motor before cha..
Explain what is the purpose of washing your cyclohexene : What is the purpose of washing your cyclohexene with saturated sodium bicarbonate. Why do you think it is more practical to wash with a solution instead of adding solid sodium bicarbonate to your cyclohexene

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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