What is the PV of the following cash flows assuming a 6% nominal discount rate? a....
Homework Answers
Answer a.
Expected Salary in 1 year = $45,000
Interest Rate = 6%
Growth Rate = 4%
Present Value = Expected Salary in 1 year / (Interest Rate -
Growth Rate)
Present Value = $45,000 / (0.06 - 0.04)
Present Value = $45,000 / 0.02
Present Value = $2,250,000
Answer b.
Annual Return = $63
Interest Rate = 6%
Present Value = Annual Return / Interest Rate
Present Value = $63 / 0.06
Present Value = $1,050
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What is the PV of the following cash flows assuming a 6% nominal
discount rate?
a....
Sam owns a business that has $45,000 per month in net cash flows. Assuming this business...
Sam owns a business that has $45,000 per month in net cash flows. Assuming this business can grow by 3% annually in perpetuity and the appropriate discount rate is 8% what is the current value of this business? (answer is 11,124,000, I just need to know how to do it please and thank you)
Find PV for following cash flows using a discount rate of 10% per period, all periods...
Find PV for following cash flows using a discount rate of 10% per period, all periods are of the same (but unspecified) duration. 0_____1_____2_____3_____4 $10 $10 $10 $110 a) use calculator, make sure that you know the procedure. p/yr=____, N=____, PMT=_____, i=____, FV=_____, PV=_____ b) use spreadsheet, make sure that you know the procedure Show spreadsheet printout c) use intuition: PV=_____because ____________________ Hint: Compare coupon rate and discount rate. d)...
What is the discount rate at which the following cash flows have a NPV of $0?...
What is the discount rate at which the following cash flows have a NPV of $0? Answer in %, rounding to 2 decimals. Year 0 cash flow = -160,000 Year 1 cash flow = 45,000 Year 2 cash flow = 31,000 Year 3 cash flow = 34,000 Year 4 cash flow = 30,000 Year 5 cash flow = 33,000 Year 6 cash flow = 38,000
What is the discount rate at which the following cash flows have a NPV of $0?...
What is the discount rate at which the following cash flows have a NPV of $0? Answer in %, rounding to 2 decimals. Year 0 cash flow = -133,000 Year 1 cash flow = 34,000 Year 2 cash flow = 40,000 Year 3 cash flow = 33,000 Year 4 cash flow = 41,000 Year 5 cash flow = 33,000 Year 6 cash flow = 45,000
What is the Net Present Value (NPV) for the below series of project cash flows, assuming...
What is the Net Present Value (NPV) for the below series of project cash flows, assuming a discount rate of 7%? Year Cash Flow CY ($450,000) CY+1 $79,000 CY+2 $125,000 CY+3 $140,000 CY+4 $135,000 CY+5 $45,000 a. $102,991 b. ($17,631) c. $22,991 d.($16,478)
What is the Net Present Value (NPV) for the below series of project cash flows, assuming...
What is the Net Present Value (NPV) for the below series of project cash flows, assuming a discount rate of 7%? Year Cash Flow CY ($450,000) CY+1 $79,000 CY+2 $125,000 CY+3 $140,000 CY+4 $135,000 CY+5 $45,000 a. $102,991 b.(17,631) c. $22,991 d.($16,478) QUESTION 2 All other things being equal, is the project with the NPV of cash flows in Problem 1 above attractive? a. Yes b. No
Mr. Agirich of Aggie Farms is considering the purchase of 100 acres of prime ranch land...
Mr. Agirich of Aggie Farms is considering the purchase of 100 acres of prime ranch land that is adjacent the ranch he now owns. Mr. Agirich can operate the additional 100 acres with present labor, machinery and breeding livestock. The land is selling for $400 per acre. Mr. Agirich believes that the operating receipts per acre of land per year will $450 and operating expenses will be $420 in present dollars. Mr. Agirich expects that the inflation rate will be...
3. What discount rate would you use to discount the Brazilian Real cash flows from the...
3. What discount rate would you use to discount the Brazilian Real cash flows from the project? Does this adequately capture the risk of investing in Brazil? 4. What is the present value of the cheap financing being provided by the Japanese equipment manufacturer? How, if at all does this change the valuation of the project? 3. Note the value of the cheap financing should be added to the Br R value that you calculated above. For this calculation you...
Help with #6? 6. (Equity Valuation Cash Flows] Following are financial statements (historical and forecasted) for...
Help with #6?
6. (Equity Valuation Cash Flows] Following are financial statements (historical and forecasted) for the Global Products Corporation. GLOBAL PRODUCTS CORPORATION BALANCE SHEETS 2016 FORECAST 2017 Cash $ 50,000 $ 60,000 Accounts receivable 200,000 290,000 Inventories 450,000 570,000 Total current assets 700,000 920,000 Fixed assets, net 300,000 380,000 Total assets $1,000,000 $1,300,000 Accounts payable 140,000 180,000 Accruals 50,000 70,000 Bank loan 80,000 90,000 co Total current liabilities 270,000 340,000 Long-term debt 400,000 550,000 Common stock ($1 par value)...
Description Mr. Agirich of Aggie Farms is considering the purchase of 100 acres of prime ranch...
Description Mr. Agirich of Aggie Farms is considering the purchase of 100 acres of prime ranch land that is adjacent the ranch he now owns. Mr. Agirich can operate the additional 100 acres with present labor, machinery and breeding livestock. The land is selling for $400 per acre. Mr. Agirich believes that the operating receipts per acre of land per year will $450 and operating expenses will be $420 in present dollars. Mr. Agirich expects that the inflation rate will...
What is the discount rate at which the following cash flows have a NPV of $0? Answer in %, rounding to 2 decimals. Year 0 cash flow = -160,000 Year 1 cash flow = 45,000 Year 2 cash flow = 31,000 Year 3 cash flow = 34,000 Year 4 cash flow = 30,000 Year 5 cash flow = 33,000 Year 6 cash flow = 38,000
What is the discount rate at which the following cash flows have a NPV of $0? Answer in %, rounding to 2 decimals. Year 0 cash flow = -133,000 Year 1 cash flow = 34,000 Year 2 cash flow = 40,000 Year 3 cash flow = 33,000 Year 4 cash flow = 41,000 Year 5 cash flow = 33,000 Year 6 cash flow = 45,000
What is the Net Present Value (NPV) for the below series of project cash flows, assuming a discount rate of 7%? Year Cash Flow CY ($450,000) CY+1 $79,000 CY+2 $125,000 CY+3 $140,000 CY+4 $135,000 CY+5 $45,000 a. $102,991 b. ($17,631) c. $22,991 d.($16,478)
What is the Net Present Value (NPV) for the below series of project cash flows, assuming a discount rate of 7%? Year Cash Flow CY ($450,000) CY+1 $79,000 CY+2 $125,000 CY+3 $140,000 CY+4 $135,000 CY+5 $45,000 a. $102,991 b.(17,631) c. $22,991 d.($16,478) QUESTION 2 All other things being equal, is the project with the NPV of cash flows in Problem 1 above attractive? a. Yes b. No
3. What discount rate would you use to discount the Brazilian Real cash flows from the project? Does this adequately capture the risk of investing in Brazil? 4. What is the present value of the cheap financing being provided by the Japanese equipment manufacturer? How, if at all does this change the valuation of the project? 3. Note the value of the cheap financing should be added to the Br R value that you calculated above. For this calculation you...
Help with #6?
6. (Equity Valuation Cash Flows] Following are financial statements (historical and forecasted) for the Global Products Corporation. GLOBAL PRODUCTS CORPORATION BALANCE SHEETS 2016 FORECAST 2017 Cash $ 50,000 $ 60,000 Accounts receivable 200,000 290,000 Inventories 450,000 570,000 Total current assets 700,000 920,000 Fixed assets, net 300,000 380,000 Total assets $1,000,000 $1,300,000 Accounts payable 140,000 180,000 Accruals 50,000 70,000 Bank loan 80,000 90,000 co Total current liabilities 270,000 340,000 Long-term debt 400,000 550,000 Common stock ($1 par value)...
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