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Present value of cash outflows related to this investment
= Initial outlay+Present value of annual payments
=55000 + Present value of annual payments of $12,000 made at the end of the year for five years, discounted at 14%
=55000+41197
=$96197=Answer
Note: Present value of annual payments is as follows
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Capital Budgeting
Option B pays five annual payments starting with $8,000 the first year followed by four annual payments of $3,000 each. Which one of the following statements is correct given these two investment options?
A.
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Calculating Present Value of Lease Payments/Preferred Stock
563712 Calculating Present Value of Lease Payments/Preferred Stock Please help me understand these questions.
1. You bought a painting 10 years ago for $100,000. If you sold it for $310,600, what was your annual return on investment?
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Rate of return on weekly investments, Lock box
Therefore average investment= $6,750,000 =3x2250000
Rate of Return on investment= 7.50%
Therefore Annual Return on investment= $506,250 =0.075x6750000
Cost of lock box system:
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Time Value of Money
You require an 8% annual return on all investments. You will receive $1,000,
$2,000, and $3,000 respectively for the next three years (end of year) on a particular investment. What is the most you be willing to pay for this investment?
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Investment Questions - Annual Investments, Monthly Payments, Etc.
543633 Investment Questions - Annual Investments, Monthly Payments, Etc. 1. An investment will require a $2.4 million cash outlay to enter and will generate perpetual cash inflows of $135,000 a year.
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Bonds and Coupon Rates
NH Co. issued 15 year bonds two years ago at a coupon rate of 8.4%. The bonds make semi-annual payments. If these bonds currently sell for 108% of par value, what is the YTM?
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NPV - Daily Payments & Mid Year Discounting
585828 NPV - Daily Payments & Mid Year Discounting 1. Batesville Manufacturing is considering a capital investment that will provide cash flows of $1,000 a year for 20 years.
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Financial management: comparing two investment options
Option A pays five annual payments starting with $8000 the first year followed by four annual payments of $3000 each. Option B pays five annual payments of $4000 each. Which of the statements is correct given these two investment options?
A.
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Discounting Cash Outflows
190563 Discounting Cash Outflows The company is deciding whether to invest in a certain capital investment. The investment requires an initial outlay of $55,000 and annual payments of $12,000 made at the end of the year for five years.