Question

You are to invest $15,000 now and to receive the following amounts in the next five...

You are to invest $15,000 now and to receive the following amounts in the next five years: year Cash Flow 3,000 5,000 4,000 3,000 2,000 If the required rate of return is 5%, should you make the investment?

Homework Answers

Answer #1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

JUST WRITTEN IN EXCEL, NO EXCEL FUNCTION IS USED

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
U2 – 20 / Suppose you invest $4,000 today and receive $9,750 in five years. a....
U2 – 20 / Suppose you invest $4,000 today and receive $9,750 in five years. a. What is the internal rate of return? (IRR) of this? opportunity? The IRR of this opportunity is ____% (Round to two decimal? places.) b. Suppose another investment opportunity also requires $4,000 upfront, but pays an equal amount at the end of each year for the next five years. If this investment has the same IRR as the first? one, what is the amount you...
Susanne invests $8,000 now and again towards the end of year 3. She gets a following...
Susanne invests $8,000 now and again towards the end of year 3. She gets a following return for 6 years. Year 0 1 2 3 4 5 6 Cash Flow 0 1,000 2,000 4,000 4,000 5,000 5,000 Assume Discount rate is 8%, answer the following: What is the Net Present Value of these cash flows? Should Susanne make invest in this opportunity? What is the future value of Net Cash Flow (end of year 6)? If Susanne had another opportunity...
Betty Kay has a contract under which she will receive the following payment for the next...
Betty Kay has a contract under which she will receive the following payment for the next 5 years: $1,000, $2,000, $3,000, $4,000 and $5,000. She will then receive an annuity of $8,500 a year for the end of the 6th through the end of the 15th year. She is offered $30,000 to cancel the contract. If the payments are discounted at 14 percent should she cancel the contract? Show all workings
you are negotiating the cash flow of a potential investment that will contractuallly last the next...
you are negotiating the cash flow of a potential investment that will contractuallly last the next five years. you are asked to invest $19,004 today and you will receive fixed payments of $362 at the end of each of the next four years. you will then receive one large, final payment at the end of the fifth year. if you require a return of 14 percent per year on such an investment, what must the large, final cash flow be...
Suppose that you have an opportunity to invest in your cousin’s burgeoning ecommerce business. If you...
Suppose that you have an opportunity to invest in your cousin’s burgeoning ecommerce business. If you were to invest $5,000 now, your cousin guarantees that you will receive the following cash flows: $3,000 at the end of 2 years, $2,000 at the end of 4 years, and $1,000 at the end of 6 years. In order to finance this investment, you would withdraw cash from your TFSA which is generating returns at a rate of 5% compounded annually. Determine (a)...
You want to invest $15,000 in government securities for the next two years. You can either...
You want to invest $15,000 in government securities for the next two years. You can either invest in a security that pays an interest rate of 7.5% per year for the next two years, or invest in a security that matures in one year but pays 5.5%. If you decide to invest in the security that matures in one year, you would then reinvest your savings for another one year. What should be the one year interest rate next year...
Betty Kay has a contract in which she will receive the following payment for the next...
Betty Kay has a contract in which she will receive the following payment for the next 5 year: $1,000, $2,000, $3,000, $4,000 and $5,000. She will then receive an annuity of $8,500 a year for the end of the 6th through the end of the 15th year. She is offered $30,000 to cancel the contract. If the payments are discounted at 14 percent should she cancel the contract? Show all workings. Please work using the Financial Calculator
Consider an investment that will pay you $3,000 per month for each of the next 3...
Consider an investment that will pay you $3,000 per month for each of the next 3 years, and then $5,000 per month in the following 5 years. If your required rate of return on this investment is 18 percent per year, what is the most you would be willing to pay for it? NOTE: Your cash flow worksheet does NOT incorporate the P/Y setting.Thus, you must use periodic interest rates when calculating the NPV with irregular cash flows. Suppose you...
Consider two investment options, A and B. For option A you must invest $5,000 now and...
Consider two investment options, A and B. For option A you must invest $5,000 now and an additional $1,000 three years from now. For option B you must invest $3,500 now, $1,500 next year, and $1000 three years from now. In both cases you will receive four annual payments of $2,000, the first of these payments one year from now. Which option would you prefer using a) simple payback method b) discounted payback method, assuming a MARR of 10% c)...
A five - year project has a projected net cash flow of $15,000, $25,000, $30,000, $35,000,...
A five - year project has a projected net cash flow of $15,000, $25,000, $30,000, $35,000, and $20,000 in the next five years. It will cost $80,000 to implement the project. If the required rate of return is 20%, conduct a discounted cash flow calculation to determine the NPV and indicate if you would recommend this project.