11. An asset is expected to generate a free cash flow of $10,000 per yearfor five years. If the required discount rate is 15%, what is the asset worthin the market? *O 33,521.55O 43,294.77O 67,043.1O None of the above12. You are analyzing a corporate bond with the following characteristics. Ithas a $1.000o face value, five years to maturity, carries a 6% coupon (paidannually) and has a yleld to maturity of 7%. What is the market price of thebond?95910001042.12None of the above

Formula: P= C×1-1+r-nr where, P is Present value of Annuity C…

Answered: 11. An asset is expected to generate a…

11. An asset is expected to generate a free cash flow of $10,000 per year for five years. If the required discount rate is 15%, what is the asset worth in the market? *

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

11. An asset is expected to generate a free cash flow of $10,000 per year
for five years. If the required discount rate is 15%, what is the asset worth
in the market? *
O 33,521.55
O 43,294.77
O 67,043.1
O None of the above
12. You are analyzing a corporate bond with the following characteristics. It
has a $1.000o face value, five years to maturity, carries a 6% coupon (paid
annually) and has a yleld to maturity of 7%. What is the market price of the
bond?
959
1000
1042.12
None of the above

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