discounting principle, Microeconomics

Assignment Help:
The owner of a firm Mr. Rajneesh expects to make a profit of Rs.5,50,000, Rs.6,50,000, Rs.7,50,000 and Rs.8,50,000 at the end of the 1st, 2nd, 3rd and 4th year respectively. Rajneesh believes that he will be in a position to sell the firm for Rs.32,00,000 at the end of the 4th year. Taking into consideration the likely risk and uncertainty factors, Rajneesh strongly feels that the appropriate discount rate is 15%. Calculate the value of the firm.
(The PV of Re.1 @15% at the end of the 1st, 2nd, 3rd and 4th year are:0.8696, 0.7561, 0.6575 and 0.5718 respectively).

Related Discussions:- discounting principle

Demand and supply, how to draw a table of the demand and supply scdule

how to draw a table of the demand and supply scdule

Demand theory, Ask question #Minintroduction to recent development in deman...

Ask question #Minintroduction to recent development in demand theory

MS6012 A01, Analyze the sustainable approach to waste reduction developed b...

Analyze the sustainable approach to waste reduction developed by the company you selected. Include the following: Its products Previous methods of production The way it implemented

Producers and the efficiency, regis is hungry for a snack. Here is the valu...

regis is hungry for a snack. Here is the value he place on a cupcake: value of the first cupcake$5, value of the second cupcake $4, value of the third cupcake $3, and the value of

What are the causes of inflation, What are the causes of inflation? De...

What are the causes of inflation? Define inflation as a steady enhance in the general price level. Then, there are, well, two and a half basic reasons: 1) Demand-pull infla

What do you meant by multinational corporation, Q. What do you meant by Mul...

Q. What do you meant by Multinational Corporation? Multinational Corporation: A multinational corporation (MNC) is a company that directly undertakes productive facilities or o

How can create more accurate measurements of development, Why and how are e...

Why and how are economists attempting to create more accurate measurements of development? The why part is simply because of the complexities built-in to the concept of develop

Write Your Message!

Captcha
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