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:

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:

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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net present value? irr factor?
Using S= $25, Put Option with Strike Price = $27, and put price = $4, draw a covered put profit diagram. Draw profit diagrams for each individual component of the covered put marking, maximum gain/loss, and breakeven points. When would use this strategy?
Suppose that consumers have utility function U(C) = log(C) where C is the consumption level and log is the natural logarithm. Consumers have initial consumptionlevels of 100 and are exposed to the following risk of loss: lose 10 with probability0.4 and lose 5 with probability 0.6. They are considering buying insurance to coverthese losses. What is the certainty equivalent level of C when uninsured? (Hint: Findthe consumption level CEsuch that U(CE) equals the expected utility whenuninsured.)
Which alternative should be selected using incremental rate of return analysis, if MARR = 12.0%? First cost Annual benefit Life ROR Do-nothing 0 10 yrs A B $6,500 $3,500 1,246 765 с D $7,500 $5,000 1,523 779 14.0% 17.5% 15.5% 9.0% B, because its ROR is the highest something other than C, because C costs the most initially C because C has the highest annual benefit C, because the C-B increment has a ROR of 13.70% and the A-B increment has a ROR of 9.66%
Cooney Co. is evaluating the following mutually exclusive projects. The manager has determined that the appropriate discount rate is 6.2% for all the recommended projects. Rank order the projects based on the profitability index. Project A Project B Project C (35,000) (65,000) (86,000) Year 0 1 2 3 55,000 40,000 22,000 22,000 44,000 44,000 35,000
Cooney Co. is evaluating the following mutually exclusive projects. The manager has determined that the appropriate discount rate is 6.20% for all the recommended projects. Rank order the projects based on the net present value. Project A Project B Project C (35,000) (65,000) (86,000) Year 0 1 2 3 55,000 40,000 22,000 22,000 44,000 44,000 35,000
Please answer fast I will rate for you sure....
I need solution with explanation please,
Answer this question as it is pertaining to two MUTUALLY EXCLUSIVE projects on the following figure. At what discount rate will you be indifferent to these two projects under the NPV rule? Group of answer choices 0% 8% 11% 14%
28) ABC Corporation is concerned that the following project has some problem with IRR. Year 0 1 2 4 5 -150-120 CF_Project 700 -100-90 How many discount rates produce a zero NPV for this project? A) One, a discount rate of 0% B) One, a discount rate of 36% C) One, a discount rate of 69% D) Two, discount rates of 0% and 36% E) Two, discount rates of 0% and 69% F) Two, discount rates of 36% and 69% G) None H) None of the above 29) ABC Corporation is considering an investment of $400 million with expected after-tax cash inflows of $102 million per year for seven years. The required rate of return is 10%. However, there is a possibility that the project will not get the required level of investments and ABC Corporation will have no other choice but to proceed with available funding (90% of the required investments). In this case, the after-tax cash inflows of $91,8 million per year are expected for seven years. As a result, on the NPV profile of a project: A) the vertical intercept shifts…
Let S = $100, K = $95, \sigma = 30%, r = 8% (continuously compounded), T = 1, and \delta = 0. Let u = 1.3, d=0.8, and n = 2. Construct the binomial tree for a European put option. At each node provide the premium, \Delta, and B.
A 07. Subject:- finance

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