Joan owns a tanning salon that is expected to produce annual cash flows forever. The tanning salon is worth $902,400.00 and the cost of capital is 11.78%. Annual cash flows are expected with the first one due in one year and all subsequent ones growing annually by 10.00%. What is the amount of the annual cash flow produced by the tanning salon in 1 year expected to be? O $506,966.29 (plus or minus $10) O $196,542.72 (plus or minus $10) O $16,062.72 (plus or minus $10) O $50,696,629.21 (plus or minus $10)

Joan owns a tanning salon that is expected to produce annual cash flows forever. The tanning salon is worth $902,400.00 and the cost of capital is 11.78%. Annual cash flows are expected with the first one due in one year and all subsequent ones growing annually by 10.00%. What is the amount of the annual cash flow produced by the tanning salon in 1 year expected to be? O $506,966.29 (plus or minus $10) O $196,542.72 (plus or minus $10) O $16,062.72 (plus or minus $10) O $50,696,629.21 (plus or minus $10)

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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A dry cleaning store is expected to make annual cash flows forever. The cost of capital for the store is 14.01 percent. The next annual cash flow is expected in one year from today and all subsequent cash flows are expected to grow annually by 3.49 percent. What is the value of the dry cleaning store if the cash flow in 5 years from today is expected to be $236,000.007 O $1,955,702.16 (plus or minus 10 dollars) O $1,408,521.54 (plus or minus 10 dollars) O $1,164,612.73 (plus or minus 10 dollars) O $2,243,346.01 (plus or minus 10 dollars) $1.084,511.06 (plus or minus 10 dollars)
You started a business that takes $1,000,000 today. If the business produces $10,000,000 (just this cash only and nothing in between) in 20 years. If the interest rate is 10%, what is the value of the future cash flow from this investment today?
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You own a building that is expected to pay annual cash flows forever. If the building is worth $2000000, the cost of capital is 5.0%, and annual cash flows are expected with the first one due in one year and all subsequent ones growing annually by 2.2%, then what is the amount of the cash flow produced by the building in 3 years expected to be?(Round the value to 0th decimal to get a whole number)
-ten years ago, Amanda Cortez invested $20,000 in an account paying an annual interest rate of 5%. What is the value of the investment today? What is the interest on interest earned on this investment? -You have just won a lottery that promises an annual payment of $130,000 beginning immediately. You will receive a total of 12 payments. If you can invest the cash flow in an investment that is paying 7% annually, what is the present value of this annuity? -A company had cash and marketable securities worth $100,000 accounts payables worth $60,000 inventory of $2,501,500, accounts receivables of $5,500,000 short-term notes payable worth $200,000, other current liabilities of 100,000, and other current assets of $212,800. Calculate the company net working capital and describe how managers manage the firm working capital. -Your parents have given you $2,500 a year before your graduation so that you can take a trip when you graduate. You wisely decide to invest the money in…
Helen Quick made an investment of $20,542.75. From this investment, she will receive $2,400 annually for the next 15 years starting one year from now. Click here to view the factor table What rate of interest will Helen's investment be earning for her? (Hint: Use Table 4.) (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round answer to O decimal places, e.g. 25%.) Rate of interest %
Give me right solution Mr. Jobs pays $1, 100, 000 for an oil well which will yield a net income of $ 200, 000.00 atthe end of each year for 10 years and then will become useless. He accumulates areplacement fund to recover his capital by annual investments at 4.5 %. At what rate doeshe receive interest on his investment at the end of each year?
Ralph has an investment worth $264,289.32. The investment will make a special payment of X to Ralph in 2 years from today. The investment also will make regular, fixed annual payments of $67,000.00 to Ralph with the first of these payments made to Ralph in 1 year from today and the last of these annual payments made to Ralph in 5 years from today. The expected return for the investment is 11 percent per year. What is X, the amount of the special payment that will be made to Ralph in 2 years? O $16,664.22 (plus or minus 10 dollars) O $20,531.99 (plus or minus 10 dollars) O $12,184.74 (plus or minus 10 dollars) O $74,370.00 (plus or minus 10 dollars) O none of the answers are within 10 dollars of the correct answer
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You've just invested $770,000 into Far Far Away Investments. This company promises to pay you and later all your future heirs a fixed amount of money once a year forever. The company earns a 5.7% annual return. How much should you expect you and all your future heirs to receive annually?
You invest $4,716.00 at the beginning of every year and your friend invests $4,716.00 at the end of every year. If you both earn an annual rate of return of 8.06%, how much more money will you have after 23.0 years?

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