Consider a policy that generates benefits and costs this year (i.e., Year 0) and.next year (Year 1). Suppose the government knows that the net benefits this yearare $100. Assume the social discount rate is 11%. If the undiscounted netbenefits next year are more than $_, then the policy will have a positive netpresent value.Answer:

Net benefita of 1st year are $100 if the net benefits of 2nd year wil be more than$ (123), then the…

Answered: Consider a policy that generates…

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 15PROB

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Consider a policy that has benefits and costs that accrue in the following way: Year 0: Benefits = 20; Costs = 40. Year 1: Benefits = 25; Costs = 35. Year 2: Benefits = 50; Costs = 10. If the social discount rate is 6%, the net present value of the policy is Answer. Please report your answer out to at least two digits (e.g., 4.44 or -0.26).
Consider a policy that has benefits and costs that accrue in the following way: Year 0: Benefits = 0; Costs = 100. Year 1: Benefits = 20; Costs = 25. Year 2: Benefits = 40; Costs = 20. Year 3: Benefits = 60; Costs = 20. Year 4: Benefits = 80; Costs = 20. If the social discount rate is 8%, the net present value of the policy is Please report your answer out to at least two digits (e.g., 4.44 or -0.26). Answer:
Based on the values in the Table below, identify the present value of benefits for Year 5 if the rate of return is 0.14. Year 1 2 3 4 5 6 7 Benefits 25000 31200 38500 51000 60100 66000 72000 Multiplier 0.87 0.77 0.68 0.59 Present Value of 21750 24024 26180 30090 Benefits A. 52287 В. 31252 C. 24040 D. 30360 B.
please answer it asap. thank youuuu!
Please help me in calculating the Return on Investment and Break-Even Point, and please help me convert the result of Break-Even Point to years and days, thanks! Attached is a formula.
Suppose that we make contributions to a fund of $125 today and $750 in twoyears for a return of $1000 in one year. First write the Net Present Value as a function of the discount factor ν. Secondly, use the NPV to calculate the yield rate of this investment (select the larger value for i. Finally, explain whether or not this is a good investment for us. Please show all work
Find The internal rate of return (IRR) and The pay-back period.
When comparing two projects with different lives, why do you compute an annuity with an equivalent present value (PV) to the net present value (NPV)? A. so that the projects can be compared on their cost or value created per year B. to reduce the danger that changes in the estimate of the discount rate will lead to choosing the project with a shorter time frame C. so that you can see which project has the greatest net present value (NPV) D. to avoid complications arising from alternating cash inflows and outflows O E. to ensure that cash flows from the project with a longer life that occur after the project with the shorter life has ended are considered
In the given table, What is the present value of plan B?
(Chapter 6) Suppose a project at your office five years from now will generate costs and benefits over two years: the year in which the project starts (year 0) and the following year (year 1). Benefits will be $1,000 in year 0 and $800 in year 1, while costs will be $150 in year 0 and S1,500 in year 1. Let the discount rate equal 3% (or 0.03). Please derive the present values for costs and benefits, and determine if benefits exceed costs for this project. Then, please explain in the form of a one-act play some of the main ideas in Dr. Harcourt's article on the history and methodology of cost-benefit analysis to someone in your office who has not studied this material previously.
The present value represents the amount of money you would have to deposit today in order to match what you would get from the income stream at the future date. The formula is Time = M = i Future value represents the total amount of money you would have if you deposit the income stream until a future date. The formula is To start our problem we need to identify the variables. Rate =r= i Income Stream S(t) = i Present Value = years % M 1. 0 S (t) et dt. Future Value = Present Value* erM dollars/year
. Evaluate the following statement:Consider two riskless perpetuities: (i) pays $120 every year; (ii) pays $10 every month. If the rates of returns of the two perpetuities are the same, investors must buy perpetuity (ii) because it makes more interest payments.

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