Question

An investor is considering an investment that pays a cash flow of $544 annually in perpetuity....

An investor is considering an investment that pays a cash flow of $544 annually in perpetuity. The first cash flow is in the 3th year. If the interest rate is 7%, what is the present value of this investment? (round your final answer to the nearest dollar)

Business   Finance   
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
1. A project pays the investor $5 att1andt2. Fromt3on, the cash flow will increase by5%. For...
1. A project pays the investor $5 att1andt2. Fromt3on, the cash flow will increase by5%. For example, the cash flow att3is $5.25, and the cash flow att4is $5.5125. The rate of return is 15%. Please calculate the project’s present value. 2.  One project has three cash flows: att0, the initial investment cost is $150; att1, the project pays $121; att2, the project needs an extra investment $242; att3, the project pays $665.5. The project has a constant spot rate of return...
Consider an investment that pays $41.98 in year 1, and then stabilizes and pays $6.1 every...
Consider an investment that pays $41.98 in year 1, and then stabilizes and pays $6.1 every year forever after that (the first cash flow is in year 2) This firm does not intend to grow and has an interest rate (required rate of return) of 7%. What is the present value of this investment opportunity? Give your answer to two decimals
Problem 4-7 Present and Future Value of an Uneven Cash Flow Stream An investment will pay...
Problem 4-7 Present and Future Value of an Uneven Cash Flow Stream An investment will pay $100 at the end of each of the next 3 years, $400 at the end of Year 4, $600 at the end of Year 5, and $700 at the end of Year 6. If other investments of equal risk earn 7% annually, what is its present value? Round your answer to the nearest cent. $ What is its future value? Round your answer to...
Problem 4-7 Present and Future Value of an Uneven Cash Flow Stream An investment will pay...
Problem 4-7 Present and Future Value of an Uneven Cash Flow Stream An investment will pay $100 at the end of each of the next 3 years, $400 at the end of Year 4, $600 at the end of Year 5, and $800 at the end of Year 6. If other investments of equal risk earn 10% annually, what is its present value? Round your answer to the nearest cent. $   What is its future value? Round your answer to...
Consider an investment that pays $18.8 in year 1, and then stabilizes and pays $6.18 every...
Consider an investment that pays $18.8 in year 1, and then stabilizes and pays $6.18 every year forever after that (the first cash flow is in year 2) This firm does not intend to grow and has an interest rate (required rate of return) of 9%.  What is the present value of this investment opportunity? Give your answer to two decimals
Find the present value of the following perpetuity. Perpetuity Payment Made ​At: Payment Period Interest Rate...
Find the present value of the following perpetuity. Perpetuity Payment Made ​At: Payment Period Interest Rate Conversion Period ​$2,400 end 1 year 11.8​% semi-annually The present value is $__. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as​ needed.)
DeBarry Corporation makes an investment of $50,000 that yields the following cash flows: Year Cash Flow...
DeBarry Corporation makes an investment of $50,000 that yields the following cash flows: Year Cash Flow 1 $10,000 2 10,000 3 16,000 4 18,000 5 20,000 a. What is the present value with a 9 percent discount rate (cost of capital)? (Use a Financial calculator to arrive at the answers. Round the final answer to the nearest whole dollar.) Net present value $ b. What is the IRR? (Round the final answer to 2 decimal places.) IRR % c. Would...
DeBarry Corporation makes an investment of $50,000 that yields the following cash flows: Year Cash Flow...
DeBarry Corporation makes an investment of $50,000 that yields the following cash flows: Year Cash Flow 1. $10,000 2 10,000 3. 16,000 4. 18,000 5 20,000 a. What is the present value with a 9 percent discount rate (cost of capital)? (Use a Financial calculator to arrive at the answers. Round the final answer to the nearest whole dollar.) Net present value $ ? b. What is the IRR? (Round the final answer to 2 decimal places.) IRR % ?...
an investment pays $20 at the beginning of each month. What kind of cash flow stream...
an investment pays $20 at the beginning of each month. What kind of cash flow stream can this be? options: - ordinary annuity - annuity - perpetuity - present value - annuity due or perpetuity sorry, this is just a theory question... thank you
An investor with a 4-year investment horizon purchases a bond that pays coupons annually at a...
An investor with a 4-year investment horizon purchases a bond that pays coupons annually at a rate of 7%. At the time of purchase, the bond has 10 years left to maturity and is selling at 93.2899 per hundred of par , with a YTM of 8%. Determine the bond's carrying value at the end of the investment horizon.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT