Question

Consider five annual cash flows of $7,000 starting in one year, followed by a single cash...

Consider five annual cash flows of $7,000 starting in one year, followed by a single cash flow of $4,000 at the end of year six. What is the present value of this stream of cash flows if your discount rate is 7%? Round to the nearest cent.

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Ans $ 31366.75

Year Project Cash Flows (i) DF@ 7% DF@ 7% (ii) PV of Project ( (i) * (ii) )
1 7000 1/((1+7%)^1) 0.934579                               6,542.06
2 7000 1/((1+7%)^2) 0.873439                               6,114.07
3 7000 1/((1+7%)^3) 0.816298                               5,714.09
4 7000 1/((1+7%)^4) 0.762895                               5,340.27
5 7000 1/((1+7%)^5) 0.712986                               4,990.90
6 4000 1/((1+7%)^6) 0.666342                               2,665.37
PV                             31,366.75
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
Starting one month from now, you need to withdraw $250 per month from your bank account...
Starting one month from now, you need to withdraw $250 per month from your bank account to help cover the costs of your university education. You will continue the monthly withdrawals for the next four years. If the account pays 0.2% interest per month, how much money must you have in your bank account today to support your future needs? How much money must you have in your bank account today to support your future needs? $ (Round to the...
What is the present value of a perpetual stream cash flows that pays $4000 at the...
What is the present value of a perpetual stream cash flows that pays $4000 at the end of year one and the annual cash flows grow at a rate of 2% per year indefinitely, if the appropriate discount rate is 11%? What if the appropriate disscount rate is 9%? A) If the appropriate discount rate is 11%, the present value of the growing perpetuity is $_____? (Round to nearest cent) B) If the appropriate discount rate is 9%, the present...
 What is the present value of a perpetual stream of cash flows that pays ​$1,500 at...
 What is the present value of a perpetual stream of cash flows that pays ​$1,500 at the end of year one and the annual cash flows grow at a rate of 3​% per year​ indefinitely, if the appropriate discount rate is 14​%? What if the appropriate discount rate is 12​%? A.  If the appropriate discount rate is 14​%, the present value of the growing perpetuity is? ​ (Round to the nearest​ cent.)
The present value of an annuity of annual cash flows, each $7,000, starting in exactly one...
The present value of an annuity of annual cash flows, each $7,000, starting in exactly one year is $100,000. The rate at which the annuity is valued is 5% p.a. 1. How many cash flows will there be? 2. What is the amount of the last cash flow? Have a good try at this before watching the video and solution. Once you have the answer to part (1), you need to think very carefully about what it means before you...
You are given three investment alternatives to analyze. The cash flows from these three investments are...
You are given three investment alternatives to analyze. The cash flows from these three investments are as​ follows: End of Year A B C 1 $3,000 $1,000 $4,000 2 4000 1000 4000 3 5000 1000 (4,000) 4 -6000 1000 (4,000) 5 6000 4000 14000 a. What is the present value of investment A at an annual discount rate of 9 ​percent? ​$____​(Round to the nearest​ cent.) b. What is the present value of investment B at an annual discount rate...
a. Calculate the present value (PV?) of a cash inflow of $500 in one year, and...
a. Calculate the present value (PV?) of a cash inflow of $500 in one year, and a cash inflow of $1,000 in 5 years, assuming a discount rate of 15%. b. Calculate the present value (PV?) of an annuity stream of 5 annual cash flows of $1,200, with the first cash flow received in one year, assuming a discount rate of 10%. c.What is the present value of a perpetual stream of annual cash flows of $100, with the first...
A project has annual cash flows of $7,000 for the next 10 years and then $9,000...
A project has annual cash flows of $7,000 for the next 10 years and then $9,000 each year for the following 10 years. The IRR of this 20-year project is 11.35%. If the firm's WACC is 10%, what is the project's NPV? Round your answer to the nearest cent. Do not round your intermediate calculations.
Consider a project with the following cash flows: Year 0: Cash flow = $500 Year 1:...
Consider a project with the following cash flows: Year 0: Cash flow = $500 Year 1: Cash flow = $0 Year 2: Cash flow = -$500 If the current market rate of interest is 8% per year, compounded annually, what is the value of this stream of cash flows expressed in terms of dollars at year 1?  (Note: This does not ask for the value as of year 0, but rather, as of year 1.) a. $0 b. $250 c. $133...
A project has annual cash flows of $7,000 for the next 10 years and then $6,000...
A project has annual cash flows of $7,000 for the next 10 years and then $6,000 each year for the following 10 years. The IRR of this 20-year project is 12.54%. If the firm's WACC is 12%, what is the project's NPV? Do not round intermediate calculations. Round your answer to the nearest cent.
A project has annual cash flows of $7,000 for the next 10 years and then $6,000...
A project has annual cash flows of $7,000 for the next 10 years and then $6,000 each year for the following 10 years. The IRR of this 20-year project is 13.88%. If the firm's WACC is 11%, what is the project's NPV? Do not round intermediate calculations. Round your answer to the nearest cent. $___
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT