of gold is $6 per ounce and the price of gold is expected to increase at a rate of 5 percent per year for the fores future. What is the current value of 0.2 million ounces of gold to be produced each year for the next five years (the discount rate is 8 percent p Multiple Choice $600.00 million $521.64 million $690.86 million

of gold is $6 per ounce and the price of gold is expected to increase at a rate of 5 percent per year for the fores future. What is the current value of 0.2 million ounces of gold to be produced each year for the next five years (the discount rate is 8 percent p Multiple Choice $600.00 million $521.64 million $690.86 million

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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what is the present value of a series of $6000 end of the year cash flowsto be received forever if the required rate of return is 5% per year and the first cash flow is one year from today? a)$8333.33 b)300 c)120000 d)12000
Determine the payback period (in years, round-off to 3 decimal places) at an interest rate of 7% per year for an asset that initially cost S30,000 , has a scrap value of $1700 whenever it in sold, and generates cash flow of 3,100 per year
Project A requires an original investment of $64,300. The project will yield cash flows of $19,600 per year for seven years. Project B has a calculated net present value of $3,760 over a four-year life. Project A could be sold at the end of four years for a price of $14,000. Below is a table for the present value of $1 at Compound interest. Year 6% 10% 12% 1 0.943 0.909 0.893 2 0.890 0.826 0.797 3 0.840 0.751 0.712 4 0.792 0.683 0.636 5 0.747 0.621 0.567 Below is a table for the present value of an annuity of $1 at compound interest. Year 6% 10% 12% 1 0.943 0.909 0.893 2 1.833 1.736 1.690 3 2.673 2.487 2.402 4 3.465 3.170 3.037 5 4.212 3.791 3.605 Use the tables above. (a) Using the present value tables above, determine the net present value of Project A over a four-year life with salvage value assuming a minimum rate of return of 12%. Round your answer to two decimal places. Enter negative values as negative numbers.$fill in the blank 1 (b) Which…
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Foc
What is the bail-out period for this project in years?
am. 144.
Project A costs $5,300 and will generate annual after-tax net cash inflows of $1,900 for five years. What is the NPV using 5% as the discount rate? Round your present value factor to three decimal places and final answer to the nearest dollar. (Click here to see present value and future value tables) 2,928 x
Emerald Enterprises is developing a new product at the cost of $ 50,000. The new product is expected to increase the cash flow for the next five years as follows: $ 10000, $ 15000, $ 15000, $ 20000 and $ 20000. If the discounting rate is 12%, what is the discounted payback period? (Note: Roundup the fractional values; that is if the payback period is 6.23 years, enter 7 years as payback period) 4 years 5 years 3 years 2 years
8. A particular investment promises to make year-end annual payments in perpetuity. The first four annual payments will be $5. After that, future annual payments will grow at 5% per year forever. What is the present value of this investment if the discount rate is 10%? a. $98.68 b. $87.57 c. $76.46 d. $65.35 e. $54.24
The price of gold is currently $1700 per ounce. The forward price for delivery in one year is $1800. An arbitrageur can borrow money at 5% per annum. What should the arbitrageur do? Assume that the cost of storing gold is zero and that gold provides no income.
JS er st un gs Sunland, Inc. management is considering purchasing a new machine at a cost of $4,370,000. They expect this equipment to produce cash flows of $791,390, $796,950, $866,730, $1,116,300, $1,212,360, and $1,300,900 over the next six years. If the appropriate discount rate is 15 percent, what is the NPV of this investment? (Enter negative amounts using negative sign e.g. -45.25. Do not round discount factors. Round other intermediate calculations and final answer to 0 decimal places, e.g. 1,525.) The NPV is tA $

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