Question

An investment in an oil field will yield no operating profit until the end of 4...

An investment in an oil field will yield no operating profit until the end of 4 years, when the investor will receive P266,525,499.  After that, he will receive P266,525,499 at the end of each year for 14 more years.  Find the present value of tis income if money is worth 7% effective.

Engineering   Civil-Engineering   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A)A sequence of quarterly payments o P6,267 each, with the first payment due at the end...
A)A sequence of quarterly payments o P6,267 each, with the first payment due at the end of 2 years and the last payment at the end of 13 years. Find the present worth of these payments if money is worth 5% compounded quarterly. B)A manufacture borrows P2,211,340 with interest at 6% compounded monthly, and agrees to discharge the loan by a sequence of equal monthly payments for 4 years with the first payment at the beginning of the 4th year.  Find...
ANSWER THE FOLLOWING: A)A sequence of quarterly payments o P6,267 each, with the first payment due...
ANSWER THE FOLLOWING: A)A sequence of quarterly payments o P6,267 each, with the first payment due at the end of 2 years and the last payment at the end of 13 years. Find the present worth of these payments if money is worth 5% compounded quarterly. B)A manufacture borrows P2,211,340 with interest at 6% compounded monthly, and agrees to discharge the loan by a sequence of equal monthly payments for 4 years with the first payment at the beginning of...
Clancy made an investment recently. The investment has promised it will begin making payments to him...
Clancy made an investment recently. The investment has promised it will begin making payments to him of $1627, increasing the payment by 14% each subsequent year. The payments will not begin, however, until the end of year 8. Clancy will receive the payments for 12 years. Today, Clancy received an offer from another investor who wanted to buy the rights to the future payments. Clancy has asked you to calculate how much those future payments are worth today so he...
Max invests a fixed percentage of his salary at the end of each year. He started...
Max invests a fixed percentage of his salary at the end of each year. He started this year with $2,000. For the next 9 years he expects his salary to increase by 5% annually and he plans to increase his investment by the same rate. How much will the investment be worth after 10 years of investment if the interest rate is 7% per year? Please use compound interest tables to find your answer
Peter Chan has just inherited some money when his uncle passed away recently. He wants to...
Peter Chan has just inherited some money when his uncle passed away recently. He wants to invest the money in a government bond because he wants to receive a steady stream of interest income and preserve his capital when the bond matures. His marginal tax rate on interest income is 40% and marginal tax rate on realized capital gains is 20%. He plans to buy a 4 percent coupon bond with ten years to maturity and pays interest semi-annually. He...
Intermediate 1. Multiple compounding periods: Find the future value of an investment of $2,500 made today...
Intermediate 1. Multiple compounding periods: Find the future value of an investment of $2,500 made today for the following rates and periods: a.            6.25 percent compounded semiannually for 12 years b.            7.63 percent compounded quarterly for 6 years c.            8.9 percent compounded monthly for 10 years d.            10 percent compounded daily for 3 years 2. Multiple compounding periods: Find the present value of $3,500 under each of the following rates and periods. a.            8.9% compounded monthly for five years. b.          ...
Investment Timing Option: Decision-Tree Analysis The Karns Oil Company is deciding whether to drill for oil...
Investment Timing Option: Decision-Tree Analysis The Karns Oil Company is deciding whether to drill for oil on a tract of land that the company owns. The company estimates the project would cost $13 million today. Karns estimates that, once drilled, the oil will generate positive net cash flows of $6.11 million a year at the end of each of the next 4 years. Although the company is fairly confident about its cash flow forecast, in 2 years it will have...
Investment Timing Option: Decision-Tree Analysis The Karns Oil Company is deciding whether to drill for oil...
Investment Timing Option: Decision-Tree Analysis The Karns Oil Company is deciding whether to drill for oil on a tract of land that the company owns. The company estimates the project would cost $7 million today. Karns estimates that, once drilled, the oil will generate positive net cash flows of $3.43 million a year at the end of each of the next 4 years. Although the company is fairly confident about its cash flow forecast, in 2 years it will have...
Time Value of Money I - Worksheet Identify the table that should be used for each...
Time Value of Money I - Worksheet Identify the table that should be used for each of the following situations in the space provided, then show the calculations to solve the problem below. FV – Future Value of 1 PV – Present Value of 1 FVA – Future Value of an Annuity PVA – Present Value of an Annuity _________ 1. Tom bought a zero-coupon bond with an 8% yield. (A zero-coupon bond does not pay interest, but the value...
At the end of this month, Leslie will start saving $200 a month for retirement through...
At the end of this month, Leslie will start saving $200 a month for retirement through his company's superannuation plan. His employer will contribute an additional $0.50 for every $1.00 that he saves. He is employed by this firm for 30 more years and earns an average of 11% monthly compounding on his retirement savings. Required: a. How much will Leslie have in his superannuation account 30 years from now? b. If at the end of year 20, Leslie voluntarily...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT