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Anastaziya [24]
1 year ago
15

What is the maximum amount you would pay for an asset that generates an income of $250,000 at the end of each of five years, if

the opportunity cost of using funds is 9 percent?
Business
1 answer:
Serggg [28]1 year ago
3 0

250,000/1.08 + 250,000/1.08^2 + 250,000/1.08^3 + 250,000/1.08^4 + 250,000/1.08^5 = $998,177.51 is the correct answer

<h3>What is an asset?</h3>

An asset is a resource having economic worth that a person, organization, or nation owns or manages with the hope that it may someday be useful.

The balance sheet of a business lists assets. They are divided into four categories: tangible, financial, fixed, and current. They are acquired or produced in order to raise a company's value or improve the operations of the company.

Whether it's manufacturing equipment or a patent, an asset can be viewed of as anything that, in the future, can generate cash flow, lower expenses, or increase sales.

An asset is anything that can increase sales, lower costs, or generate cash flow, whether it be a patent or manufacturing equipment.

To learn more about asset, visit:

brainly.com/question/14404094

#SPJ4

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The pretax cost of debt  is the YTM of the bond and the aftertax cost of debt is tax-adjusted. You can use a financial calculator and key in the following inputs.

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Maturity of the bond as of today; N = 28*2 = 56

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Interest paid on borrowed money (debt) has tax benefits through interest tax shield. Based on this, the after tax cost of debt can be calculated. You can solve it by adjusting the pretax cost of debt to incorporate this tax benefit. The formula is as follows;

Aftertax cost of debt = Pretax cost of debt (1-tax)

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D

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I hope this answered your question. If you have any more questions feel free to ask away at Brainly.

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