The value of any asset is the PV of future cash flows it is expected to provide. Calculate the PV of the following cash flow stream using a required return of 5%, Year O negative 200, year 1 200, year 2 300 and years 3-5 150 per year Question 10 PV 633 PV 750 PV 1033 PV 708 Ajax corp. had sales of 700k, op costs of 250k and interest expense of 50k. What is its TIE? O 14 05 O 19

The value of any asset is the PV of future cash flows it is expected to provide. Calculate the PV of the following cash flow stream using a required return of 5%, Year O negative 200, year 1 200, year 2 300 and years 3-5 150 per year Question 10 PV 633 PV 750 PV 1033 PV 708 Ajax corp. had sales of 700k, op costs of 250k and interest expense of 50k. What is its TIE? O 14 05 O 19

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 worth (P) of all the cash flows if F=16000, n=6 years, and i= 8% per year? Select one: O a. $16,480.00 b. $103,824.00 O c. $10,082.71 O d. $34,608.00
What is the NPV of the estimated cash flows for the following project using a Weighted Average Cost of Capital of 7.0%? Year 0 1 2 3 Cash Flow -140 50 70 90 Group of answer choices 47.54 38.63 59.94 70.00 41.34
Alonso Yards Corp. is considering an investment opportunity with the following expected net cash inflows: Alonso Yards Corp. Year 1 $203,000 Year 2 $185,000 Year 3 $106,000 The company uses a discount rate of 9%, and the initial investment of $380,000. Calculate the NPV of the investment.
Consider the following project: Period Net cash flow 0 -100 1 0 2 78.55 3 78.55 The internal rate of return is 20%. The NPV, assuming a 20% opportunity cost of capital, is exactly zero. Calculate the expected economic income and economic depreciation in each year. (Negative answers should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.) 1 Period 2 3 Change in value (economic depreciation) (20.00) 54.55 65.46 Expected economic income
K (Present value of annuities and complex cash flows) You are given three investment alternatives to analy End of Year 1 5678AWN2 3 A $15,000 15,000 15,000 15,000 15,000 Investment B $15,000 15,000 15,000 15,000 C $20,000 60,000 a. What is the present value of investment A at an annual discount rate of 19 percent? (Round to the nearest cent.) BELEID
Please Need Correct Answer with Explanation with calculation
► CRC Inc. is buying new equipment that has the following cash flows: Year Cash Flow O-$17.7 What is the NPV if the interest rate is $6%? O $482.24 D -$537.78 0 -$500 O $22.44 1 $100 2 $200 3 $250
Barry Inc. is considering a project that has the following cash flow and WACC data. What is the project's MIRR?WACC = 12.85% Year 0 1 2 3 4 5 CFs -$35,600 10,100 20,200 30,300 40,400 50,500 `
Consider another set of net cash flows: Year Cash flow 0 1,000 1 1,000 2 0 3 1,500 4 2,000 5 3,500 What is the net present value of the stream if the opportunity cost of capital is 10 percent? a. What is the value of the stream at the end of year 5 if the cash flows are invested in an account that pays 10 percent annually? 2. What cash flows today (time 0), in lieu of the 1,000 cash flow, would be needed to accumulate $10,000 at the end of year 5? (Assume that the cash flows for years 1 through 5 remain the same.)
Present value of annuities and complex cash flows) You are given three investment alternatives to analyze. The cash flows from these three investments are as follows: End of Year 1 2 3 45678 A $13,000 13,000 13,000 13,000 13,000 Investment B $13,000 13,000 13,000 13,000 C $ 18,000 54,000 a. What is the present value of investment A at an annual discount rate of 25 percent? (Round to the nearest cent.) b. What is the present value of investment B at an annual discount rate of 25 percent? (Round to the nearest cent.) c. What is the present value of investment C at an annual discount rate of 25 percent? (Round to the nearest cent.)
Find teh present value of the streams of cash flows shown in the following table. Assume that the firms opportunity cost is 14% A: Year Cash Flow 1 -$2100 2 2900 3 4000 4 5900 5 8200 B: Year Cash Flow 1 $9000 2-5 $5000/yr 6 $7200 C: Year Cash Flow 1-5 $12000/yr 6-10 $8000/yr The presevent vaule of stream A, B, and C
Consider another set of net cash flows: Year Cash flow 0 1,500 1 2,000 2 0 3 1,500 4 3,000 5 4,000 What is the net present value of the stream if the opportunity cost of capital is 11 percent? What is the value of the stream at the end of year 5 if the cash flows are invested in an account that pays 11 percent annually? What cash flows today (time 0), in lieu of the 2,000 cash flow, would be needed to accumulate $20,000 at the end of year 5? (assume that the cash flows for years 1 through 5 remain the same.)

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