What is the present value of the car payments

Assignment Help Financial Management
Reference no: EM131341410

A car dealership offers you no money down on a new car. You may pay for the car for 3 years by equal monthly end-of-the-month payments of $604 each, with the first payment to be made one month from today. If the discount annual rate is 16.99 percent compounded monthly, what is the present value of the car payments? Round the answer to two decimal places.

Reference no: EM131341410

Questions Cloud

Considering three options in obtaining fasteners : Wocket Enterprises is considering three options in obtaining fasteners which they sell to construction contractors. The quantity of fasteners that they sell every month is 2000 units. However, this price is not available for quantities lower than 300..
About the accuracy of duration : What is the Macaulay duration of a 7 percent coupon bond with five years to maturity and a current price of $1,025.30? What is the modified duration? Compare your answer to the new bond price calculated from the usual bond pricing formula. What do yo..
What is degree of operating leverage : A proposed project has fixed costs of $39,000 per year. The operating cash flow at 6,000 units is $68,000. Ignoring the effect of taxes, what is the degree of operating leverage? What is the new degree of operating leverage?
What is present value of the annuity : What is the present value of the following annuity? $2,668 every quarter year at the end of the quarter for the next 7 years, discounted back to the present at 9.33 percent per year, compounded quarterly?
What is the present value of the car payments : A car dealership offers you no money down on a new car. You may pay for the car for 3 years by equal monthly end-of-the-month payments of $604 each, with the first payment to be made one month from today. If the discount annual rate is 16.99 percent ..
Initial fixed asset investment-variable costs-tax rate : Consider a 10-year project with the following information: initial fixed asset investment = $360,000; straight-line depreciation to zero over the 10-year life; zero salvage value; price = $29; variable costs = $18; fixed costs = $169,200; quantity so..
Considering investing in project with the cash flows : Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 9 percent, and that the maximum allowable payback and discounted payback statistic for the pro..
Depreciation tax shield for this project in year : Your firm needs a machine which costs $240,000, and requires $45,000 in maintenance for each year of its 5 year life. After 5 years, this machine will be replaced. The machine falls into the MACRS 5-year class life category. Assume a tax rate of 35% ..
Conviction about the stock price future movements : The common stock of the P.U.T.T. Corporation has been trading in a narrow price range for the past month, and you are convinced it is going to break far out of that range in the next 3 months. What would be a simple options strategy to exploit your c..

Reviews

Write a Review

Financial Management Questions & Answers

  After the distribution of the stock dividend

The company with the common equity accounts shown here has declared a 10 percent stock dividend when the market value of its stock is $40 per share. Common stock ($1 par value) $ 390,000 Capital surplus 847,000 Retained earnings 3,730,800 Total owner..

  Current assembly system-vibration isolation platforms

A small company that manufactures vibration isolation platforms is trying to decide whether it should upgrade the current assembly system (System D), which is rather labor-intensive, with one that is more highly automated (System C). Some components ..

  Prepare an income statement for the first month

Jake and Dan start a business to build custom bicycles. Jake invests personal funds of $25,000 and Dan invests $20,000. Grandma Jake invested $5,000 with a preference to be cashed out after one year for $6,000.  Prepare a balance sheet for day zero, ..

  Calculate the present value of the annuity due

You can have a regular annuity of 3 payments of $706 each year, or you can receive the same payments as an annuity due. Which one is more valuable? To answer this, calculate the present value of the annuity due and subtract the present value of the r..

  Money market account with an annual return

You plan to deposit $1,500 per year for 6 years into a money market account with an annual return of 2%. You plan to make your first deposit one year from today. What amount will be in your account at the end of 6 years? Round your answer to the near..

  What is the minimum expected annual return for stock

In order to fund her retirement, Michele requires a portfolio with an expected return of 0.11 per year over the next 30 years. She has decided to invest in Stocks 1, 2, and 3, with 25 percent in Stock 1, 50 percent in Stock 2, and 25 percent in Stock..

  What is the total market value of this firm

The current stock price for a company is $34 per share, and there are 7 million shares outstanding. This firm also has 170,000 bonds outstanding, which pay interest semiannually. If these bonds have a coupon interest rate of 9%, 19 years to maturity,..

  Total expected budget to total actual results or performance

You are the administrator of a community hospital that provides inpatient and outpatient services. Your budget anticipates 30,000 inpatient days this year at $650 revenue per day. Compare your TOTAL expected budget to TOTAL actual results or performa..

  What is the initial investment outlay for the spectrometer

You must evaluate a proposed spectrometer for the R&D department. The base price is $150,000, and it would cost another $22,500 to modify the equipment for special use by the firm. What is the initial investment outlay for the spectrometer, that is, ..

  The firm has the opportunity to develop new drug

Biopharma is a pharmaceutical company. Biopharma’s annual stock returns have a CAPM beta of 1.25 (i.e. β =1.25). The market portfolio’s return is 13%, and the risk free rate is 5%. a. What is the required expected return for Biopharma according to th..

  Smaller stocks have lower returns than larger stocks

On average, smaller stocks have lower returns than larger stocks? On average, Treasury bills have higher returns than stocks. Portfolios of smaller stocks are typically lss volatile than individual small stock

  What is present value of perpetual stream of cash flow

What is the present value of a perpetual stream of cash flows that pays $7,000 at the end of year one and the annual cash flows grow rate at a rate of 4% per year indefinitely, if the appropriate discount rate is 11%? What if the appropriate discount..

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