Reference no: EM131241233
You work for a small, local telecommunications company. In five years, the company plans to undertake a major upgrade to its servers and other IT infrastructure. Management estimates that it will need up to $450,000 to cover all related costs; however, as a fairly young company, the goal is to pay for the upgrade with cash and not to take out loans. Right now, you have $300,000 in a bank account established for Capital Investments. This account pays 6% interest, compounded annually. A member of the finance department has approached you with an investment opportunity for the $300,000 that covers a five-year period and has the following projected after-tax cash flows:
Year Projected Cash Flow
1 $94,000
2 $114,000
3 $134,000
4 $114,000
5 $94,000
Based on this information, answer the following questions: 1) How much money will be in the bank account if you leave the $300,000 alone until you need it in five years?
2) If you undertake the investment opportunity, what is the Nominal Payback Period?
3) Using the factors for 6%, what is the Discounted Payback Period?
4) What is the Net Present Value of this investment opportunity?
5) Which option - make the investment or leave the money in a savings account - would you recommend to your CEO? Why? What additional factors/information might make you change your point of view?
Predict the number of physician office visits
: Estimate the Poisson regression model to predict the number of physician office visits. Use all of the explanatory variables in a linear form without any transformations.
|
Describe what marketing means to you
: First, describe what marketing means to you. Next, answer the following question: How did you participate in marketing-related activities this past week as both a consumer and on the job?
|
Calculate the moment of inertia of two thin
: Calculate the moment of inertia of two thin, hollow plastic spheres, stuck together, routing about their common center of mass. Each sphere has a radius of 23.0 cm, and a mass of 380 gm.
|
Calculate the continuously compounded annual return
: CFE5305: FINANCIAL TIME SERIES ANALYSIS - Calculate the continuously compounded annual return for the Petrobras stock for 2009. Calculate the simple annual return for 2009 and explain the Jarque-Bera (J-B) test. Using this test, what conclusion can ..
|
What is the net present value of the investment opportunity
: If you undertake the investment opportunity, what is the Nominal Payback Period? Using the factors for 6%, what is the Discounted Payback Period? What is the Net Present Value of this investment opportunity?
|
Compute aic bic and aicc as in multinomial regression model
: Note that the proportional odds model assumes both the ordinality of the response and equal coefficients across different logits. Based on the information criteria, is there evidence to suggest that these assumptions lead to a poor model fit? Expl..
|
Discuss understanding of contract law
: Discuss, incorporating your understanding of contract law, the following:- Whether a contract was formed. If so, when was it formed and who were the contracting parties? Bernard's legal position and remedies
|
Calculate the value of a zero coupon bond
: Calculate the value of a zero-coupon bond with a face value of $100 and a remaining life of 6 months at the ends of the final nodes of the tree.
|
How do government usually bring inflationary process to halt
: How do Governments usually bring an inflationary process to a halt? Briefly explain how their strategies to deal with rising inflation could sometimes be counterproductive in the longer term.
|