Solution-What is the net present value

What is the net present value

Assignment Help Financial Management

Reference no: EM131407

Problem (1):

On completion of MBA, Eddie and Mike were so pleased with the amount of useful and interesting knowledge that they had learned that they convinced some friends who are wealthy alums to create a scholarship. The scholarship will allow three needy students to take the courses in perpetuity. The annual cost of tuition and books for the course is $2000. The university will earn 6% on the fund. The scholarship will be created by a single payment to the university from their friends.

A- How large must the payment be to fund the scholarship?

B- What amount would be needed if the university could earn 9% rather than 6% per year on the funds?

Problem (2):

The Bulldog Company will purchase a Tractor for a $14,000 initial investment. The tractor will generate annual after-tax cash inflows of $4, 000 for the next 4 years.

A- What is the Net Present Value (NPV) of the asset if the company's required rate of return on such assets is 10%?

B- What would the maximum required rate of return (closet whole-percentage rate) that the firm can have and still accept the asset?

Reference no: EM131407

Questions Cloud

How air conditioner market affected by unusually hot summer : Describe how the market for Alaskan king crab will be affected if, at the same time that medical reports confirm that suspected health benefits from consumption of Alaskan king crab meat, wages are increased for trawler men

P-value to test hypotheses : P-value to test hypotheses,

Analyse a set of data and write a memo : To analyse a set of data, and write a memo, identifying and explaining your insights into the operation of Todd Restaurants.

Solve the linear model : o This is a linear model. If your model needs a different engine, then you need to rethink your approach to the model. Remember, there are no IF, Max, or MIN statements in linear models.

What is the net present value : What is the Net Present Value (NPV) of the asset if the company's required rate of return on such assets is 10%?

Neurospora cross was made between a strain : The Neurospora cross was made between a strain that carried mating type A and the mutant allele arg-1(arg) and another strain the carried mating-type a and the wild type arg-1 (+)gene

Draw a map of the f+ strain : Determine which of these would synthesize the enzymes for Histidine synthesis

Evaluation structure logical and achievable. : Health care organisational processes management, service administration, service provision and delivery

Business information systems : Analyse and explain the business information systems required for this a small to medium size business.

User Account

All Pages

What is the net present value

Reference no: EM131407

Reference no: EM131407

Questions Cloud

Reviews

Write a Review

Financial Management Questions & Answers

Financial management for profit and non profit organizations

Indifference curve analysis

A synthesis of contemporary market orientation perspectives

Long-term financing needed

Determine the constant growth rate in dividends

Foreign company acquisition

Business finance task - capital budgeting

What is a business plan

Future generation telecommunication technology

Calculate payback period and internal rate of return (irr)

Financial statement analysis project

Negative growth stock

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT