Cash flows, present value, cash flow streams, investments
Not what you're looking for?
1) Seaborn Co. has identified an investment project with the following cash flows. If the discount rate is 10 percent, what is the present value of these cash flows? What is the present value 18 percent? At 24 percent?
Year Cash Flow
1 $950
2 $1040
3 $1130
4 $1075
2.) Investment X offers to pay you $6,000 per year for nine years, whereas Investment Y offers to pay you $8,000 per year for six years. Which of these cash flows streams has the higher present value if the discount rate is 5 percent? If the discount rate is 15 percent?
3.) An investment offers $5,300 per year for 15 years, with the first payment occurring one year from now. If the required return is 7 percent, what is the value of the investment? What would the value be if the payments occurred for 40 years? For 75? Forever?
4.) If you put up $34,000 today in exchange for a 7.65 percent, 15-year annuity, what will the annual cash flow be?
5.) Your company will generate $73,000 in annual revenue each year for the next eight years from a new information database. If the appropriate interest rate is 8.5 percent, what is the percent value of the savings?
Purchase this Solution
Solution Summary
This solution helps with various business problems. Concept covered include cash flows, present value, cash flow streams, and value of investment.
Education
- BE, Bangalore University, India
- MS, University of Wisconsin-Madison
Recent Feedback
- "Your explanation to the answers were very helpful."
- "What does 1 and 0 means in the repair column?"
- "Went through all of the formulas, excellent work! This really helped me!"
- "try others as well please"
- "Thank you, this helped a lot. I was not sure how to plug in those numbers to a formula. This was a great help. Now I have to figure out how to explain cost of capital is used in net present value analysis, and how cost of capital is used in net present value analysis. This stuff gets confusing."
Purchase this Solution
Free BrainMass Quizzes
Understanding the Accounting Equation
These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.
Employee Orientation
Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.
Balance Sheet
The Fundamental Classified Balance Sheet. What to know to make it easy.
Operations Management
This quiz tests a student's knowledge about Operations Management
Understanding Management
This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.