Question

How do I figure out the cost of capital? The problem tells me it is 14%, but I don't understand where the decimals come from

Introduction to corporate finance

Answer #1

cost of capital is one of the decisions making parameters in capital budgeting problems. Specifically it is required to calculate the NPV i,e Net present value of the firm.

We have to discount all future cash flows using the cost of capital to get the present value of cash flows

PV of Future cash flows, ( Assuming Project is for 03 Years)

Here C1 = Cash Flow for Year 1

C2 = Cash Flow for Year 2

C3 = Cash Flow for Year3

r = Cost of Capital for Your example it is 14% = 14% =
**14 / 100 = 0.14**

So for Denominator terms we always use 1+r as a formula . So
**1+r = 1 + 0.14 = 1.14**

Now , PV of Future cash flows

**converting into decimal Just we have to divide Interest
Rate by 100 = r / 100 = 14 / 100 = 0.14**

How do I figure out the opportunity cost of down payment? What
is the opportunity cost rate of a $22,106 loan with $5000 down?

I have a physics problem that gives me a projectile launched. It
tells me the angle above horizontal, the MINIMUM speed while in
flight, and the amount of meters the ball traveled when it lands.
The question asks for max height. What's tripping me up is this
MINIMUM velocity. Where on the projectile is the velocity a
minimum. I was thinking the minimum velocity would be at the
highest point, because at the highest point the velocity is 0,
however,...

I am trying to figure out how to find the test statistic using
Excel. I understand the formula- that I need to use parameter 'p'
and 'normal distribution' ….z= sample proportion and minus the
'population portion' then we divide p*q and divide n -sample size.
I understand how to populate the data in the formula. I just can't
figure out how to solve this using Excel. (my only option with my
class) I need step by step directions if possible....

What is the best calculator to use for finance - I need to
figure out at what how long an investment would take to get to a
certain level (i.e. I have 25,000 saved at 2.5% interest, how long
will take for me to have 300,000 saved at this rate.). Thank you in
advance for any and all advise.
Ruth

How do I get the P value for this problem? ...
In a General Social Survey, respondents working full time or
part time reported how many hours they worked in the previous week
at all jobs. The random sample of 1,729 produced a mean of 41.8
hours with a standard deviation of 14.6 hours. Using these data
what would you conclude in a test of the following hypothesis?
Ho: M = 40 hours
Ha: M > 40 hours
The teacher...

How do i figure out the MAGI for form 8962>
Income is 55010 and adjusted income is 46943; self employment
tax is 2115, heath deduct for self employed is 1152, alimony
4800
And deduction from 8814 is 1400

I would like assistance with problem 6.2, in statistics for
managers using excel, 8th edition. I do not understand where the
numbers came from in the formula? If P(z<1.84)-P( z-1.57) -
.9671-.0582, where did .9671 and .0582 come from? How do you deduce
those numbers from that formula?

The correct answer doesn't interest me as much as understanding
how to work out the problem. In fact, according to other resources,
the answers are D & B (in that order). I'm struggling to
understand how to apply principles from microeconomics to work out
the problem for myself. Any help would be much appreciated.
-In order to produce 100 pairs of oven gloves, Marcia incurs an
average total cost of $2.50 per pair. Marcia’s marginal cost is
constant at $10.00...

Hey. I was trying to figure out this problem but wasn't sure
what the correct answer is. I would appreciate it. Thank you.
How do you calculate projected benefit obligation (PBO)?
A. Use the present value of expected retirement annuity
payments, earned by the empolyee so far
B. Use the undiscounted sum of all future retirement
payments
C. Use the present value of vested retirement payments

I am trying to figure out the correct formula in statistics that
I need to use for this question.
When you or anyone else attempts to tell me and my
associates that 1223 persons account for our opinions and tastes
here in America, I get mad as hell! How dare you! When you or
anyone else tells me that 1223 people represent America; it is
astounding and unfair and should be outlawed.
The writer then goes on to claim that...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 16 minutes ago

asked 29 minutes ago

asked 36 minutes ago

asked 50 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 2 hours ago

asked 2 hours ago