What is the present value of the growing perpetuity

Assignment Help Financial Management
Reference no: EM131089543

What is the present value of a perpetual stream of cash flows that pays $80,000 at the end of one year and grows at a rate of 7% indefinitely?

The rate of interest used to discount the cash flows is 9%. What is the present value of the growing perpetuity?

Verified Expert

This assignment requires calculating the present value of a growing perpetuity using the time value of money concept.

Reference no: EM131089543

Questions Cloud

Prepare appropriate summary statistics on each variable : BUS201 Assignment. Descriptive analysis, Prepare appropriate summary statistics on each variable and comment on each of these. Also look at the histograms and the separate line plots for each company. Comment
Consumers distributed uniformly around the circle : Suppose there are 8 firms located equidistantly around a circle whose circumference is equal to 1. There are 400 consumers distributed uniformly around the circle. Each consumer gets utility U = 3.5 from buying a unit of the good from a firm which se..
Which government is right for you : "Which government is right for you?" Perhaps a better way of saying it is this: would you like a caretaker type of government who looks out for you or would you like a hands-off type of government that basically let's you make your own decisions? For..
Designed to reduce moral hazard created by deposit insurance : Which of the following are regulations that are designed to reduce the moral hazard created by deposit insurance?
What is the present value of the growing perpetuity : What is the present value of a perpetual stream of cash flows that pays $80,000 at the end of one year and grows at a rate of 7% indefinitely?
Good idea for the fed to pay interest on bank reserves : Banks today have more than $2 trillion in excess reserves, i.e., reserves beyond what they are required to keep. (Required reserves are less than $0.2 trillion, by the way.) Before 2008, banks kept almost no excess reserves. Why, according to some pe..
How much will sarah have to invest today : How much will Sarah have to invest today? If she earned an annual return of 18%, how soon could she then retire?
What is the proportion for smoker for men : In a survey to identify of risk factors for heart disease among men and women were asked about if they ever smoke. Of the 430 men, 116 said they smoke. Of the 380 women, 73 said they smoke. What is the proportion for smoker for men
Write an essay examining a cultural conflict : What conflict have you chosen and what are your initial impressions of the economic, cultural, political, and territorial causes of the conflict?

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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