What is the present value of a perpetual stream of cash flows that pays $5, 000 at the end of year one and the annual cash flows grow at a rate of 4% per year indefinitely, if the appropriate discount rate is 11%?'

Q: What is optimal capital budget?

A: Budget: The estimation of the income and expenditure of the particular future period and is…

Q: What is market value ratio?

A: Ratio is the relation between two different quantities obtained after dividing one by another.

Q: Define total net present value (TNPV)

A: Total net present value of an investment is the present value of the future cash inflows due to a…

Q: Explain renewal probability?

A: Answer: Renewal probability is nothing but the average percentage of renters in a building that is…

Q: Define the term internal rate of return?

A: The internal rate of return (IRR) is a capital budgeting metric used to gauge the benefit of…

Q: WHAT IS THE VALUE OF DISCOUNTED FLOWS

A: As per Time value of money, there are present values as well as future values.

Q: Define the term Risk-free real return?

A: Risk-free real return is a hypothetical number that mirrors the foreseen return on a venture that…

Q: what about in terms of present value?

A: Present value helps us know the value of future cash flows in the present time. A higher interest…

Q: What is the Aggregating Risk over Time?

A: Aggregating Risk over time is the measure of a solitary customer's presentation of a foundation or…

Q: what is the effect of making changes to net present value calculations

A: Net Present Value = Present value of future cashflows - Initial Investment

Q: What is net present value?

A:

Q: Define continuing value

A: The question is based on the concept of valuation of firm. The continuing valuation method is also…

Q: Define the term current market value.

A: The current market value (CMV) gives parties interested in making a transaction the approximate…

Q: What is the concept of present value? What is discounting?

A: Present value means value of future cash flows in todays terms.

Q: Comparison of NPV, IRR or Payback period

A: The net present value (NPV) is the difference between the present value of cash inflows and…

Q: What is current market value? Describe about it.

A: Market value: Market value is the price at which, both seller and buyer agree to exchange the…

Q: Explain risk-neutral valuation

A: A risk-neutral valuation is a probability measure used to help pricing derivatives and other…

Q: what is net present value in project management?

A: Net present value (NPV) is an important technique that is been used by the project manager in order…

Q: Define adjusted present value approach (APV)

A: Introduction Adjusted present value is a valuation method introduced in 1974 by Stewart Myers.…

Q: Explain prime rate

A: Introduction: Usually an interest rate is the amount that a lender pays calculated as a percentage…

Q: what is return. Define risk and explain how it is assessed

A: Definition

Q: Define maturity value

A: Maturity date: Maturity date is the due date on bond. On due date, the issuer is supposed to pay the…

Q: what is payback period

A: Capital Budgeting: It is the planning process used to determine whether an organization invests in a…

Q: Explain Yield Enhancement?

A: A "yield enhancement technique" is an investment approach that includes purchasing options at the…

Q: What is present value interest factor?

A: The present value interest factor is a mathematical equation used to estimate today's value of money…

Q: Define yield.

A: Yield can be considered as a metric for cash flow for the investor on the amount with which a…