Question

What is the present value of the following net cash flows if the
discount rate is 12%:

Year Cash Flow

1-5 $10,000 each year

6-10 $15,000 each year

11-15 $17,000 each year

A. $ 86,462

B. $ 79,252

C. $151,400

D. $144,037

Sarah borrowed $125,000 to buy a house, her your loan cost was 11% and she promised to repay the loan in 15 equal annual payments. What is the principal outstanding after the first loan payment?

A. $121,367

B. $123,088

C. $107,617

D. None of the above

Answer #1

Select - Option - A ........ **$ 86,462**

Year | CF | DF | PV |

1 | 10000 | 0.892857 | 8928.571 |

2 | 10000 | 0.797194 | 7971.939 |

3 | 10000 | 0.71178 | 7117.802 |

4 | 10000 | 0.635518 | 6355.181 |

5 | 10000 | 0.567427 | 5674.269 |

6 | 15000 | 0.506631 | 7599.467 |

7 | 15000 | 0.452349 | 6785.238 |

8 | 15000 | 0.403883 | 6058.248 |

9 | 15000 | 0.36061 | 5409.15 |

10 | 15000 | 0.321973 | 4829.599 |

11 | 17000 | 0.287476 | 4887.094 |

12 | 17000 | 0.256675 | 4363.477 |

13 | 17000 | 0.229174 | 3895.961 |

14 | 17000 | 0.20462 | 3478.537 |

15 | 17000 | 0.182696 | 3105.836 |

Present
value |
86460.37 |

Question - 2 ........ **Select - A. $121,367**

(1) Find the PVIFA = [ 1 - (1+r)^{-n} ] / r = [ 1 -
(1.11)^{-15} ] / 0.11 = 7.1908695759

(2) Find the annual equal installment = Principle / PVIFA = 125,000 / 7.1908695759 = 17383

(3) Principle outstanding after 1st installment = 125000 *
(1.11) - 17383 **= 121,367**

John borrowed $125,000 to buy a house. His loan cost was 11% and
he promised to repay the loan in 15 equal annual payments. How much
principal is amortized with the first payment?
$17, 383
$13,750
$3,633
$121,367

What is the net present value of a project with the following
cash flows if the discount rate is 10 percent?
Year
0
1
2
3
4
Cash Flow -$32,000
$9,000 $10,000
$15,200 $7,800
A. $1,085.25
B. $1,193.77
C. $3,498.28
D. $4,102.86
E. $4,513.15

1a. What is the present value of the following set of cash flows
if the discount rate is 13.9%? (the cash flows occur at the end of
each period) (round answer to nearest penny and enter in the
following format 12345.67)
Year 0 cash flow = -1400 (a negative cash flow)
Year 1 cash flow = 400
Year 2 cash flow = 2400
Year 3 cash flow = 1100
Year 4 cash flow = 2400
Answer:
1b. A credit card...

. Calculate the IRR and NPV for the following cash flows. Assume
a 15% discount rate
Year
Project 1
Cash flow
Project 2
Cash flow
0
-$20,000
-$20,000
1
1,000
12,000
2
3,000
15,000
3
4,000
3,000
4
12,000
4,000
5
15,000
1,000
9. If your tenant pays you rent of $24,000 a year for 10 years,
what is the present value of the series of payments discounted at
10% annually?
10. You are going to invest $300,000 in a...

Calculate the NPV for a project with the following cash flows.
The discount rate (weighted average cost of capital) is 7% and the
initial investment is $50,000.
Cash flow each year:
Year 1: $10,000
Year 2: $12,000
Year 3: $15,000
Year 4: $15,000
Year 5: $15,000
Answer: ___________________________ (12 pts)

What is the net present value of the following set of cash flows
at a discount rate of 10 percent? Time Period Cash Flow 0 -$16,000
1 4,500 2 8,500 3 12,000 Group of answer choices $4,131 $2,783
$9,000

Manheim Candles is considering a project with the following
incremental cash flows. Assume a discount rate of 10%.
Year
Cash Flow
($15,000)
$10,000
$20,000
$30,000
Calculate the discounted payback period of the project.

A project will generate the following cash flows. If the
required rate of return is 15%, what is the project’s net present
value?
Year
Cash flow
0
–$50,000
1
$15,000
2
$16,000
3
$17,000
4
$18,000
5
$19,000
Select one:
a. $16,790.47
b. $6,057.47
c. $3,460.47
d. $1,487.21
e. –$3,072.47
Question 5
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Question text
A project will generate the following cash flows. The required
rate of return is 15%. If the...

1. Which of the following describes loan cash flow (LCF)?
A) A term used when borrowed money is involved, equal to the
gross income less deductions (not including either depreciation or
principal or interest on the loan).
B) The cash flow reflecting the sum of the principal payment and
the interest payment.
C) A term used when no borrowed money is involved, equal to the
gross income less deductions (excluding depreciation
allowances).
D) The amount remaining after income taxes and...

11.a) Find the PV of the following stream of cash
flows, if the discount rate is 7%:
Years Cash
Flow
1-15 $ 12,000
16-35 $ 18,000
36-40 $ 20,000
b) Following up on the above stream, what would the
PV be if the 39th cash flow was missing?
c) What would the FV of part (a) be? At the same 7%
rate.
d) what would the FV be if the last...

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