turner video will invest $76,344 in a project. The firm's cost of capital is 10 percent. The investment will provide the following inflows: Year 1: Cash Flow $15,000 Year 2: Cash Flow $17,000 Year 3:Cash Flow $21,000 Year 4: Cash Flow $25,000 Year 5: Cash Flow $29,000 The internal rate of return is 11 percent. a. If the reinvestment assumption of the net present value method is used, whatwill be the total value of the inflows after five years? (assume the inflows come at the end of each year) b. if the reinvestment assumption of the internal rate of return method is used, what will bethe total value of the inflows after five years? c. generally, is one investment assumption likely to be better than another?

Part (a):If the reinvestment assumption of net present value is used, the 10% required rate of…

Answered: turner video will invest $76,344 in a…

Advanced Engineering Mathematics

10th Edition

ISBN:9780470458365

Author:Erwin Kreyszig

Publisher:Erwin Kreyszig

Chapter2: Second-order Linear Odes

Section: Chapter Questions

Problem 1RQ

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Subject-advance maths
Darnell Enterprises constructed an addition to its building at a cost of $70,000. Extra annual expenses are expected to be $1850, but extra income will be $14,000 per year. How long will take for the company to recover its investment at an interest rate of 10% per year? What is meant by no return payback or simple payback?
Henry is going to retire in 22 years and would like to invest $50,000 now into his retirement account. An investment plan has a guarantee return of 8% (annual rate), compounded monthly. Determine the amount in his retirement account after 22 years.
(Please draw cashflow diagram) What amount of money invested today at 15% interest rate compounded quarterly can provide the following scholarships: P30,000 at the end of each year for 6 years, P40,000 for the next 6 years and P50,000 thereafter?
A deposit of $15,000 is made in a trust fund that pays 3.5% interest, compounded semi-annually. It is specified that the balance will be given to the eldest grandchild of the donor after the money has earned interest for 35 years. How much will the grandchild receive?
Mac Corp. is considering a project that has the following cash flow data. What is the project’s internal rate of return (IRR)? Year 0 1 2 3 Cash flow -$1,000 $425 $425 $425
What simple interest rate will convert a $200 investment into $220 in one year?
The Fast Reader Company supplies bulletin board services to numerous hotel chains nationwide. The owner of the firm is investigating the desirability of employing a billing firm to do her billing and collections. Because the billing firm specializes in these services, collection float will be reduced by 10 days. Average daily collections are $7,300, and the owner can earn 8.6% annually (expressed as an APR with monthly compounding) on her investments. If the billing firm charges $500 per month, should the owner employ the billing firm? Assuming the billing firm can reduce the collection float immediately, as soon as Fast Reader starts the service they will receive $ dollar.) The present value of the billing firm's charges is $ Fast Reader (Round to the nearest dollar.) employ the billing firm. (Select from the drop-down menu.) (Round to the nearest
An association had a fund balance of 75 on January 1 and 60 on December 31. At the end of every month during the year, the association deposited 10 from membership fees. There were withdrawals of 5 on February 28, 25 on June 30, 80 on October 15, and 35 on October 31. Calculate the dollar-weighted rate of return for the year.
An investor purchased shares of Marshmallow Steels at a price of $0.75 per share. One year later, the shares traded at $2.00, but they fell back to $1.05 by the end of the second year from the date of purchase. Calculate the percent change in the share price: a. In the first year % Round to two decimal places b. In the second year % Round to two decimal places c. Over both years % Round to two decimal places
A manufacturer’s contribution margin income statement for the year follows. Prepare contribution margin income statements for each of the two separate cases below. Unit selling price decreases by 5% and units sold and produced increase by 8%. Hint: A unit increase has both a sales and costs impact. Fixed costs increase by $20,000, variable costs per unit decrease by $2, and units sold and produced increase by 500 Use the table below to figure out the Sales, Variable Cost, Contribution Margin, Fixed Cost, and Income (loss) of each question.
draw the cash flow diagram, and write the general formula of the perpetuity

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