What is the present value of investment-interest rate

Assignment Help Financial Management
Reference no: EM131049710

Investment X yields a payment of $5000 at the end of year 1, a payment of $7000 at the end of year 2, a payment of $9000 at the end of year 3, and a payment of $11000 at the end of year 4. Investment Y yields a payment of $11000 at the end of year 1, a payment of $9000 at the end of year 2, a payment of $7000 at the end of year 3, and a payment of $5000 at the end of year 4.

A) What is the present value of Investment X if the interest rate is 6%?

B) What is the present value of Investment Y if the interest rate is 6%?

Reference no: EM131049710

Questions Cloud

The northern california power agency : Apower consortium that distributes a mix of "green" and conventional electricity is implementing an XML-based settlements system that drives costs out of power distribution.
Canned messages data structure : Examples of canned messages stored in the canned messages data structure (you can store as many canned messages as you would like):
Determine the concentration of product at t=2h assuming p0=0 : Determine the concentration of biomass at t=2h assuming quasi steady state. If alpha=0.2g/g Determine the concentration of product at t=2h assuming P0=0
Needed to fix something in account : Assume an IT technician was working on your machine because they needed to fix something in your account, and you shared your credentials with them so they could do their work.
What is the present value of investment-interest rate : Investment X yields a payment of $5000 at the end of year 1, a payment of $7000 at the end of year 2, a payment of $9000 at the end of year 3, and a payment of $11000 at the end of year 4. Investment Y yields a payment of $11000 at the end of year 1,..
How should dsi assess risk of adopting a cloud-based osds : What model should DSI adopt for a cloud-based OSDS - how should DSI assess the risk of adopting a cloud-based OSDS?
Write five pages paper on soccers positive effect on germany : Write a five Pages paper on Soccers positive effect on Germany and German culture and also write one page on democratic socialism.
Monthly mortgage payment : Your monthly mortgage payment (principal plus interest) is $1200. If you have a 30-year loan with a fixed interest rate of 0.5% per month, how much did you borrow from the bank to purchase your house?
Debt free life dream car : Debt free life dream car $27,500, dream house $1,724,000, and dream job $72,000 per year. how long will it take you to save for the full price of your dream car using 5% of your monthly income in a money market that earns an average of 1.5%. How long..

Reviews

Write a Review

Financial Management Questions & Answers

  Home theatre business-revenue growth

Maxwell started a home theatre business in 2011. The revenue of his company for that year was $270,000. The revenue grew by 18% in 2012 and by 28% in 2013. Maxwell projected that the revenue growth for his company in the next 3 years will be at least..

  Residents are covered by non-private pay payors

The owner of Shady Rest Nursing Home insists that the facility earn $80,000 in annual profits. How much must the administrator raise the per day charge for the privately insured residents if 25 percent of the residents are covered by non-private pay ..

  What is the future value of an annuity

What is the future value of an annuity of 17 deposits of $2300 each year with nominal rate of interest being 10% compounded continuously? HKL Co. plans a new project that will generate $ 170,000 of continuous cash flow each year for 6 years and addit..

  Maker of high quality chocolates

The Swiss House is a maker of high quality chocolates. The company is considering opening retail outlets. Mgt feels that retailing involves a different set of risks than it's current production operations and is therefore concerned about using the co..

  Analyzed the project whose cash flows

Cornell Systems analyzed the project whose cash flows are shown below. It is 100% debt financed. The tax rate is 20%. The yield on company`s bond is 6,25% Year 0 1 2 3 Cash flows -$950 $500 $400 $300 Calculate the projects NPV, Profitability ratio an..

  What is its expected return

Expected Return If a company's current stock price is $25.40 and it is likely to pay a $1.15 dividend next year. Since analysts estimate the company will have a 12% growth rate, what is its expected return?

  What is the implicit interest in dollars

A zero coupon bond with a face value of $1,000 is issued with an initial price of $507.96. The bond matures in 18 years. What is the implicit interest, in dollars, for the first year of the bond's life? Use semiannual compounding.

  Total real return on investment

You bought one of Rocky Mountain Manufacturing Co.’s 8.5 percent coupon bonds one year ago for $1,046.30. These bonds make annual payments and mature eleven years from now. If the inflation rate was 3.7 percent over the past year, what would be your ..

  Prepare a report for the managing director

Prepare a report for the managing director both outlining the theoretical arguments and explaining the real-world influences on the gearing levels of firms.

  Calculate the after-tax cost of debt

Solve the following problems and be able to discuss them relative to the financial management of a company.Calculate the after-tax cost of debt

  George jefferson established a trust fund

George Jefferson established a trust fund that provides $171,500 in scholarships each year for worthy students. The trust fund earns a 2 percent rate of return. How much money did Mr. Jefferson contribute to the fund assuming that only the interest i..

  Arbitrage argument by constructing two appropriate portfolio

Prove via a no-arbitrage argument by constructing two appropriate portfolios that the value of an American call is equal to the value of a European call.

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