A factory costs $540,000. You forecast that it will produce cash inflows of $170,000 in year 1, $230,000 in year 2, and $400,000 in year 3. The discount rate is 11%. What is the value of the factory?
Q: Tyrone Company wants to purchase a property that costs $150,000. The full amount needed to finance…
A: Present Value = $150,000Interest rate = r = 12%Time = t = 6 years
Q: To calculate the number of years until maturity, assume that it is currently January 15, 2019. All…
A: Number of years= Jan 15,2024 - Jan15, 2019= 5Number of periods= number of years * 2 semiannual…
Q: Use the data provided for Gotbucks Bank Inc. to answer this question. Notes to the balance sheet:…
A: Data given:Fixed-rate loans are selling at par and have five-year maturities with 12 percent…
Q: Calculate the most an investor would pay for an ordinary annuity that pays $10,000 per year for 15…
A: An annuity is a contract that you have with an insurance provider that calls for regular payments to…
Q: Jeff deposits 10 into a fund today and 20 fifteen years later. Interest for the first ten years is…
A: First Payment = p1 = 10Second Payment = p2 = 20nominal discount rate for first 10 years compound…
Q: A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a…
A: Variance Portfolio:The portfolio with the lowest variance is one that includes risky assets and in…
Q: Pari, a financial advisor, emphasizes to his clients the importance of asset allocation in…
A: Asset allocation is an investment strategy that involves dividing an investment portfolio among…
Q: Lucky Furniture Store has the following balances in its financial statements for the past financial…
A: Sales = s = R1,854,200Receivables = r = R180,270
Q: Barne plc is considering production and sale of a new type of coffee machine. This will allow them…
A: In this case, we will discuss the capital investment appraisal measures used and on that basis a…
Q: Assume that interaffiliate cash flows are uncorrelated with one another. Calculate the standard…
A: The problem quotes that transactions are not correlated. In the context of it, there is a need to…
Q: 2. Simple versus compound interest Financial contracts involving investments, mortgages, loans, and…
A: The idea of the time value of money (TVM) holds that a quantity of currency is considerably more…
Q: Suppose you can afford $500 monthly payments and you will be able to pay $9000 as a balloon payment…
A: Balloon payments refer to the lump sum amount that is to be paid at the end of the period of the…
Q: started 8 years ago and sold the units on 1 February 2023 for an amount of R350 000. Indicate the…
A: Internal rate of return refers to the rate at which investments are generating profits on invested…
Q: Kline Construction is an all-equity firm that has projected perpetual EBIT of $292,000. The current…
A: Value of Levered Firm:A levered firm is a firm that has debt in its capital structure. The value of…
Q: 3. Triangular Arbitrage. Assume the following information: Quoted Price $.90 $.30 NZ$3.02 Value of…
A: Arbitrage refers to the profits that are earned by exploiting the price difference of the same…
Q: Technology overview: What’s interesting about your inquiry topic? Present an inquiry topic outline…
A: Fintech platforms have emerged as a transformative force in the financial industry, revolutionizing…
Q: You want to buy a car, and a local bank will lend you $30,000. The loan will be fully amortized over…
A: Calculation of Monthly loan payment :To calculate the monthly loan payment, we can use the formula…
Q: A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a…
A: The optimal risky portfolio refers to the mix of assets that minimizes the risk for the investor for…
Q: A 30-year maturity, 8% coupon bond paying coupons semiannually is callable in five years at a call…
A: Yield to Maturity refers to the internal rate of return of a bond. It is the percentage of return on…
Q: ool Proof Software is considering a new project whose data are shown below. The equipment that would…
A: Sales revenue=$82,300operating costs=$20,700Tax rate=25%Required:Year-1 Cash flow=?
Q: Use the 2021 FICA tax If a taxpayer is self-em Employee's Rates 7.65% on first $142,80 income 1.45%…
A: Taxes on earnings are calculated as shown below.
Q: Finance suppose you work for apple, inc. an American multinational technology company headquartered…
A: Internal rate of return is the modern method of capital budgeting that is used to determine the…
Q: Using the data in the following table, and the fact that the correlation of A and B is 0.50,…
A: In the given case, we have given the return of each stock of different number of years. And, the…
Q: Absalom Energy’s 9% coupon rate, semiannual payment, $1,000 par value bonds that mature in 10 years…
A: Coupon rate = 9%Par value = $1000Maturity = 10 yearsCallable period = 9 yearsCallable Price =…
Q: A 55-year-old man deposits $50,000 to fund an annuity with an insurance company. The money will be…
A: Semi-annual payment refers to an amount that is paid at every semi-annual period for the repayment…
Q: Assume you are given the following information for firms A and B: A B D E Price i EBIT No taxes…
A: A replication strategy is a way of trading to determine the value of an asset on the basis of cash…
Q: Investors expect the market rate of return this year to be 16.50%. The expected rate of return on a…
A: In the given case, we have provided the expected market return rate, beta and the expected…
Q: If you invest 16,500 at 5% compounded seminally for 2 years what is T?
A: The present value refers to the amount invested today in an asset that will be present at some…
Q: What semiannually compounded rate is equivalent to 6% compounded: a. Annually? (Do not round the…
A: The idea of the time value of money (TVM) holds that a quantity of money is valued currently more…
Q: Computation of cost of capital is significant part of the financial management to decide the capital…
A: The cost of capital is the minimum rate of return that a company must earn on its investments to…
Q: Assume the return on a market index represents the common factor and all stocks in the economy have…
A: Stock's Beta1Standard Deviation31%Total number of stocks20One-half alpha2%Second-half alpha-2%Equity…
Q: A company's 5-year bonds are yielding 10% per year. Treasury bonds with the same maturity are…
A: Yield= 10% per yearRisk free rate= 2.85%Average inflation premium=2.55%Maturity risk premium = 0.1 ×…
Q: John, a 70 year-old male has just purchased a $10,000 two-year term policy. Assume that annual…
A: A term policy is a kind of life insurance that offers protection for a specific time span. It offers…
Q: No tables, please, only formulas correct answers are: (i) i(4) = 0.05956 pa (ii) i(4) = 0.07613…
A: Compound = Quarterly = 4
Q: Consider the following table, which gives a security analyst’s expected return on two stocks and the…
A: In the given case, we have provided the probability of each scenario and the expected return on two…
Q: Jackson Corporation's bonds have 8 years remaining to maturity. Interest is paid annually, the bonds…
A: A bond refers to an instrument that the companies use to raise debt capital from investors. Bonds…
Q: What's the present value, when interest rates are 7.5 percent, of a $50 payment made every year…
A: Present value of perpetuity = Equal periodic payment / Periodic interest rate
Q: Division You have been asked to estimate the beta of a high-technology firm, which has three…
A: Companies utilize the capital budgeting process to assess possible big projects or investments.
Q: Find the future values of these ordinary annuities. Compounding occurs once a year. Do not round…
A: Future value is the estimated value of current assets that is discounted at an assumed rate of…
Q: What does the balanced scorecard have to do with getting the best possible return on investment?
A: The Balanced Scorecard (BSC) is a strategic management framework that provides a holistic approach…
Q: Consider the following table: Scenario Probability Stock Fund Rate of Return Bond Fund Rate of…
A: Covariance is a statistical measure that quantifies the relationship between two variables. In the…
Q: Six sites have been identified for a parking lot in downtown Blacksbu should be chosen based on the…
A: Cost of capital or MARR is benchmark rate of return and any rate of return…
Q: Generally, the safest and most marketable instrument for short-term investment is Select one or…
A: A marketable instrument refers to a financial instrument that can be easily bought or sold in the…
Q: Intro You have $3,000 in your savings account, and want to buy a car for $20,000. Part 1 If you are…
A: The FV of an investment refers to the cumulative value of its cash flows at a future date assuming…
Q: 15-year maturity bond with par value of $1,000 makes semiannual coupon payments at a coupon rate of…
A: A bond is a kind of debt security issued by the government and private companies for raising funds…
Q: Mary's Music Store reported net income of $146,000. Beginning balances in Accounts Receivable and…
A: The net cash flows from operations refer to the amount of money that the company receives or pays…
Q: Assume that somebody has to pay £2000 in three years’ time and £3000 in seven years’ time. They want…
A: The TVM provides valuable insights and tools for financial decision-making, allowing individuals and…
Q: Required: (ii) Using the most likely cost of capital of 10%, calculate the sensitivity of Project…
A: NPV is a capital budgeting tool to decide whether the capital project should be accepted or not. As…
Q: Consider an adjustable rate mortgage (ARM) of $190,000 with a maturity of 30 years and monthly…
A: Adjustable Rate Mortgage ( ARM)= $190,000 Time period = 30 Years of maturity Payments=monthly…
Q: Find the following values. Compounding/discounting occurs annually. Do not round intermediate…
A: The idea of the time value of money (TVM) holds that a quantity of currency is considerably more…
A
-
What is the value of the factory?
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 1 images
- A grocery store is considering the purchase of a new refrigeration unit with an Initial Investment of $412,000, and the store expects a return of $100,000 in year one, $72000 in years two and three, $65,000 in years four and five, and $38,000 in year six and beyond, what is the payback period?If a copy center is considering the purchase of a new copy machine with an initial investment cost of $150,000 and the center expects an annual net cash flow of $20,000 per year, what is the payback period?You are purchasing a factory at $550,000. Your projected cash flow streams from the factory will be $135,000 in year 1, $152,000 in year 2, and $285,000 in year 3. What is the rate of return on this factory investment?
- A factory costs $970,600. You forecast that it will produce cash inflows of $839,085 in year 1, $85,000 in year 2, and $200,000 in year 3. The discount rate is 15.50%. a. Calculate the PV of cash inflows. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Present value $ b. Should the company invest in the factor? (Click to select)If a production machine costs $18,000, and we are able to set up the following payment arrangements with the bank: Number of payments = 4 (one at the end of each year) Interest Rate = 5% Amount of each annual payment = $5,000 Questions: What is the present value of the stream of cash flows (the series of payments)? Will we be provided with enough purchasing power at the present time to be able topurchase the machine?You are thinking of making an investment in a new factory. The factory will generate revenues of $1,960,000 per year for as long as you maintain it. You expect that the maintenance costs will start at $90,160 per year and will increase 5% per year thereafter. Assume that all revenue and maintenance costs occur at the end of the year. You intend to run the factory as long as it continues to make a positive cash flow (as long as the cash generated by the plant exceeds the maintenance costs). The factory can be built and become operational immediately and the interest rate is 6% per year. a. What is the present value of the revenues? - b. What is the present value of the maintenance costs? c. If the plant costs $19,600,000 to build, should you invest in the factory? EIER
- Suppose you have an internship at a chemical factory. Your supervisor asks you to calculate the net present value of an expansion project. Suppose the expansion costs $5 million now and $1 million next year. The plant will produce revenues of $4 million in the second year and $4 million in the third year. Calculate the net present value (or the present value of the benefits less than the present value of the costs) at a 4% discount rate. Enter your answer in millions of dollars with two decimal places.A factory costs $810,000. You reckon that it will produce an inflow after operating costs of $171,000 a year for 11 years. a. If the opportunity cost of capital is 7%, what is the net present value of the factory?The net present value of an investment is the present value of the expected cash flow minus the initial investment. The company's managers hf. require a 9% return (required rate of return). The managers are considering buying a device that costs ISK 210,000. The device will create a cash flow of ISK 84,000. during the next three years, at the end of each year. What is the net present value of this investment (net present value of investment)? Group of answer choices a. ISK 21,261 b. ISK 212,604 c. ISK 2,629 d. 42,000 ISK
- Suppose you wish to purchase a factory that will yield an annual return of $12,000 for 12 years, after which the factory will have no value. You want to earn 8.25% annually on your investment and also set up a sinking fund to replace the purchase price. If money is placed in the fund at the end of each year and earns 4.2% compounded annually, how much should you pay for the factory? a) $81,921 b) $81,487 C)O $80,487 $80,921 e) O $82,487 Boş bırak Cevap Listesi KÖnceki 2/12 Sonraki> КарatCecil company is considering the of a new machine. The machine cost $227,500 and will generate a yearly cash inflow of $35,000. what is the payback period? Requirement: what is the payback period?A printing press machine has a cash equivalent of P250,000. For the first three years, it will provide P20,000 worth of profit each year. For the next four years, annual profit will be P35,000. For the last two years, expenses will exceed revenues and will have a loss of P10,000 each year. Calculate the acceptability of this investment using FW method if MARR is 18% per year. What is ERR if ϵ=15%?