Purchase Solution

# Learning NPV and Cash Flows

Not what you're looking for?

I am practicing in my NPV and other cash flows analysis methods. Please show me the steps and formulas used to arrive to solutions.

Problem#1
What is the net present value of the following cash flows at a discount rate on 12%.
T=0/-250,000 t=1/100,000 t=2/150,000 t=3/200,000.

Problem#2
You would like to have enough money saved to receive a \$100,000 per year perpetuity after retirement so that you and your family can lead a good life. How much would you need to save in your retirement fund to achieve this goal (assume that perpetuity payments start one year from the date of your retirement. The interest rate is 10%)?

Problem#3
You would like to have enough money saved to receive a growing perpetuity, growing at a rate of 5% per year, the first payment being \$100,000, after retirement so that you and your family can lead a good life. How much would you need to save in your retirement fund to achieve this goal (assume that the growing perpetuity payments start one year from the date of your retirement. The interest rate is 10%)?

Problem#4
Macrohard Company expects to pay a dividend of \$6 per share at the end of year one, \$8 per share at the end of year two and then be sold for \$136 per share. If the required rate on the stock is 20%, what is the current value of the stock?

##### Solution Summary

The expert examines learning NPV and cash flows. The money received for money is discussed.

Solution provided by:
###### Education
• Chartered Accountant (Equivalent to CPA in US), Institute of Charted Accountants of India
• Bachelor of Commerce, West Bengal University
###### Recent Feedback
• "I got this feedback and I wanted to know if you can explain it to me. I noticed something within your workings which I believe is incorrect.  It looks like you've mistaken the Debt ratio for the Equity Multiplier.  You've done a calculation to determine Return on Equity (ROE) but if you take a look at the ratios provided for us you'll see ROE listed on the bottom line already.  You can use ROE, Profit Margin and Total Asset Turnover to figure out the Equity Multiplier amount.  Equity multiplier is not provided for us and we need to calculate it.  I really hope this is helpful to you.  "
• "Very attentive to detail. Answers are designed in easy to understand format."
• "Fast response and thorough answer"
• "thank you very much! "
• "thank you so much !!!!!!!"

##### Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

##### Marketing Research and Forecasting

The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.

##### Managing the Older Worker

This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce

##### Cost Concepts: Analyzing Costs in Managerial Accounting

This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.