Question

You are considering the purchase of an investment that would pay you $12,000 per year for...

You are considering the purchase of an investment that would pay you
$12,000 per year for Years 1 and 2, $22,000 per year for Years 3 and 4,
and $8,000 per year for Years 5 and 6. If you require a 14 percent
rate of return, and the cash flows occur at the end of each year, how
much would you be willing to pay for this investment?

Homework Answers

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
You are considering the purchase of an investment that would pay you $10,000 per year for...
You are considering the purchase of an investment that would pay you $10,000 per year for Years 1 and 2, $8,000 per year for Years 3 and 4, and $6,000 per year for Years 5 and 6. If you require a 15 percent rate of return, and the cash flows occur at the end of each year, how much would you be willing to pay for this investment? In other words, what is the NPV of these cash flows? a....
You are considering the purchase of an investment that would pay you $5,000 per year for...
You are considering the purchase of an investment that would pay you $5,000 per year for Years 1‑5, $3,000 per year for Years 6‑8, and $2,000 per year for Years 9 and 10. If you require a 16 percent rate of return, and the cash flows occur at the end of each year, then what is the MOST you would be willing to pay for this investment? Answer to 0 decimal places.
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...
You are considering an investment with the following cash flows: Year 1: �5,000, Year 2: �7,000,...
You are considering an investment with the following cash flows: Year 1: �5,000, Year 2: �7,000, Year 3: �13,000. If you have a required return of 14%, How much would you be willing to pay for this investment?
How much would you be willing to pay today for an investment that pays the following...
How much would you be willing to pay today for an investment that pays the following cash flows at the end of each of the next 4 years if your required rate of return is 9% per year? Period        Cash Flow 0 $0 1 $100 2 $200 3 $300 4 $400
You are considering an investment that promises to pay $1,000 per year for the next 10...
You are considering an investment that promises to pay $1,000 per year for the next 10 years. The interest rate associated with investments having similar risk is 6.0%. How much would you be willing to pay for this investment? Hint: students may wish to use Excel to facilitate the calculations
Consider an investment that will pay you $500 in the first year. This payment will grow...
Consider an investment that will pay you $500 in the first year. This payment will grow by 10 percent each year through year 12. Starting in year 13 it will pay you $1,200 annually for 15 years. After that, it will pay you nothing. If your required rate of return on this investment is 14 percent, how much would you be willing to pay for it today? Round your answer to the nearest whole dollar.
Consider an investment that will pay you $1,000 each year for five years. After that, the...
Consider an investment that will pay you $1,000 each year for five years. After that, the payment will grow by 3 percent per year indefinitely, so that the payment in year 6 will be $1,030, the payment in year 7 will be $1,060.90, and so forth. If your required rate of return on this investment is 13 percent, what is the most you’d be willing to pay for it? If the investment costs you $8,000 today, what is its net...
Suppose you are considering to purchase a 30-year, semiannual bond with a coupon rate of 10%...
Suppose you are considering to purchase a 30-year, semiannual bond with a coupon rate of 10% and a par value of $1,000. If you require a 12 percent nominal yield to maturity on the bond, how much would you be willing to pay for the bond?
You are considering a project that promises you cash flows of 534 USD each year for...
You are considering a project that promises you cash flows of 534 USD each year for 9 years. Based on the riskiness of the project, you require a 10 percent return. What is the maximum you should be willing to pay?