Please only answer practice question 5. Question 5On the basis of the data provided at question 3, what is your expected NPV if you invest $150 mi in this hotel today? Consider your WACC to be 10%.O a. -$ 1,002,273O b. $1,002,273O. $4,961,520O d. -$ 911,158 QuestionThe following situation will be used in questions 3, 4 and 5. A hotel is projected to have $ 55mi in total revenues during the following year. Total expenses are projected to be $ 40 mi. 3%of the total revenue is allocated as capital reserves. In the next four years, the annual growthrates in total revenues and total expenses will be (2%, 3%, 4%, 3%) and (4%, 7%, 4%, 3%)respectively. In the following years, revenues and total expenses will stabilize at a constantrate of 2.5%. The market discount rate on such assets is estimated at 9%(after alladjustments). Going out cap rate is 7,5% (after all adjustments). Cost of sales is usually 3%.Assume no additional costs (brokerage etc.) at the time of the purchase. Your investmenthorizon is 5 years. What is the estimated hotel value today?O a $ 48,477,484O b. $ 154,961,520O. $ 162,515,008O d. $ 224,901,389

In question 5 , on the basis of data provided in the question 3, expected NPV if you invest $150 mi…

Question 5 On the basis of the data provided at question 3, what is your expected NPV if you invest $ 150 mi in this hotel today? Consider your WACC to be 10%. O a. -$1,002,273 O b. $1,002,273 O c. $4,961,520 O d. -$911,158

Question 5 On the basis of the data provided at question 3, what is your expected NPV if you invest $ 150 mi in this hotel today? Consider your WACC to be 10%. O a. -$1,002,273 O b. $1,002,273 O c. $4,961,520 O d. -$911,158

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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QUESTION 7 If you have $100K, and want to invest in assets A, B and C. Asset A has historical AVG return of 15%, asset B 20%, and asset C 10%, in what proportions of $100K would you allocate into assets A, B and C? i.e. Which scenario is most rational? A > B > C A > C > B B > A > C C >A > B
You have an opportunity to invest $104,000 now in return for $79,800 in one year and $29,600 in two years. If your cost of capital is 9.2%, what is the NPV of this investment? Question content area bottom Part 1 The NPV will be $XX enter your response here . (Round to the nearest cent.)
Q2: A $15,000 investment is to be made with anticipated annual returns as shown in the spreadsheet in the below Figure. If the investor's time value of money is 10% per year, what should be entered in cells B11, B12, and B13 to obtain present, annual, and future equivalent values for the investment? Also draw the cash flow of this problem. 1 2 3 36457 9 10 11 12 13 A EDY 0 1 lekm 2 3 4 SOTSPAL 5 6 7 F B Cash flow -$15,000 $2,000 $2,500 $3,000 $3,500 $4,000 $4,000 $4,000 $4,000
Vipul b
Suppose you makes a $1,000 initial investment today, a $4,000 additional investment at the end of year one, and another $500 investment at the end of year two. You had returns of 10% in year one, 2% in year two, and -5% in year three. What is the dollar-weighted average return on your investments? Select one: a. -2.59% b. 10.00% c. 0.51% d. -0.73% e. 3.00%
Find the IRR for an investment that has an initial outlay of 25,000 and is expected to achieve 30,000 after 7 years. O a. 1.4% Ob. 2.6% O c. 3.1% Od. 4.8% O e. None of the above Next page
Subject: accounting
j. Find the PV and the FV of an investment that makes the following end-of-year payments. The interest rate is 10%. Payment $100 $300 $500 Year 1 2 3 Round your answers to the nearest cent. PV of investment: $ FV of investment: $
K You have been offered a unique investment opportunity. If you invest $11,300 today, you will receive $565 one year from now, $1,695 two years from now, and $11,300 ten years from now. a. What is the NPV of the opportunity if the cost of capital is 5.7% per year? Should you take the opportunity? b. What is the NPV of the opportunity if the cost of capital is 1.7% per year? Should you take it now? a. What is the NPV of the opportunity if the cost of capital is 5,7% per year? If the cost of capital is 5.7% per year, the NPV is $. (Round to the nearest cent.)
What is the rate of return (the interest rate) on an investment today of $30,626.24 if the company expects to receive $45,000 in 5 years? а. 9% O b. 8% С. 6% d. 7%
Assume an investment is priced today at $5,000 and has the following income stream: Year Cash Flow 1 123 2 3 4 $ 1,000 - 2,000 3,000 3,000 Would an investor with a required rate of return of 15 percent be wise to invest at a price of $5,000? Multiple Choice No, because the investment has a net present value of - $1,139.15. No, because the investment has a net present value of - $1,954.91. Yes, because the investment has a net present value of $1,069.66. Yes, because the investment has a net present value of $1,954.91. An investor would be indifferent between purchasing and not purchasing the above investment at the stated price.

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