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butalik [34]
3 years ago
11

A project costs $12,800 and is expected to provide a real cash inflow of $10,000 at the end of each of years 1 through 5. Calcul

ate the net present value of this project if inflation is expected to be 4% in each year and the firm employs a nominal discount rate of 10.76%. $26,311.15 $33,522.30 $28,756.79 $33,294.07
Business
1 answer:
Lemur [1.5K]3 years ago
6 0

Answer:

Net Present Value = $28756.79

Explanation:

First we need find the real rate of interest

Real rate of interest = (Nominal rate of interest - Inflation rate )

Real Rate of interest = (10.76% - 4%)

Real of Interest = 6.76%

Now using stream of cash flows and discount the at 6.76%

0 -12800              1.000        

1 10000               0.937

2 10000               0.877

3 10000               0.822

4 10000               0.770

5 10000               0.721

Through multiplying discount value with cash flow we get the discounted value of cash flows.

0 -12800      x        1.000      = -12800  

1 10000       x       0.937      =     9370

2 10000       x        0.877     =     8770

3 10000       x        0.822     =    8220

4 10000       x        0.770      =   7700

5 10000       x        0.721       =  7210

Adding the discounted cash flows we get the value of Net present value and that is equal to $28756.79

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Answer:

The option which is an example of a debt funding source can be banks, credit unions, or any external lender.

Explanation:

  • Debt funding is when a company raises money by marketing bonds, bills and notes, etc. to the investors
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2 years ago
Thornbrough Corporation produces and sells a single product with the following characteristics: Per Unit Percent of Sales Sellin
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6 0
2 years ago
Incorrect answer. Your answer is incorrect. Try again.
liubo4ka [24]

Answer:

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It enables buyers and sellers to buy and sell independently through the market makers, known as dealers.

Foreign exchange and bonds are found in the dealer market.

In the secondary market, securities are traded by investors while in the primary market, they are created.

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