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Usimov [2.4K]
3 years ago
8

Consider the following uneven cash flow stream: Year Cash Flow 0 $0 1 $250 2 $400 3 $500 4 $600 5 $600 What is the present (Year

0) value if the opportunity cost (discount) rate is 10 percent? A Spreadsheet solution: $1,815.87 B Spreadsheet solution: $1,715.87 C Spreadsheet solution: $1,915.87 D Spreadsheet solution: $1,615.87
Business
1 answer:
viva [34]3 years ago
7 0

Answer:

The correct answer is: $1715,87

Explanation:

To calculate the present value you need to use the Net Present Value. The NPV is the difference between the present value of cash inflows and the present value of cash outflows over a period of time.

The formula is:

             n

<h3>NPV= ∑ [Rt/(1+i)^t] - I0</h3>

            t-1

where:

R t​     =Net cash inflow-outflows during a single period t

i=Discount rate of return that could be earned in alternative investments

t=Number of timer periods

<u>In this exercise:</u>

NPV= 0+ 250/1,10^1 + 400/1,10^2 + 500/1,10^3 + 600/1,10^4 + 600/1,10^5

<u>NPV= $1715,87</u>

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2 years ago
What is a companys obligation to contribute to the sustainability of natural resources
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Answer:

Companies have a corporate social responsibility towards their environment.

Explanation:

Corporate social responsibility implies that companies are expected to engage in industrial practices that would not result in harm to their environment. For example, the amount of carbon being released into the environment must be controlled as excessive release of carbon can be detrimental to health. It is also not right for waste to be discharged into the oceans because the health of the sea animals, the ocean itself and those who swim in it are at risk.

To promote sustainability, companies avoid practices that would eventually harm their environment. Abiding by these practices might take a longer route, but is eventually cost effective and beneficial.

8 0
3 years ago
You have assigned the following values to these three firms: Price Upcoming Dividend Growth BetaEstee Lauder $50.00 $1.70 16.50%
satela [25.4K]

Answer and Explanation:

The formula to compute the required rate of return using the CAPM and constant growth model is as follows

Under CAPM

The Required rate of return = Risk-free rate of return + Beta × (Market rate of return - risk-free rate of return)

Constant growth model = Dividend ÷ Price + Growth rate

For Estee lauder,

Under CAPM = 4% + 0.74 × (10% - 4%)

= 4% + 0.74 × 6%

= 4% + 4.44%

= 8.44%

Under the Constant growth model

= $1.70 ÷ $50 + 16.50%

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For Kimco realty,

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Under CAPM = 4% + 1.02× (10% - 4%)

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Under the Constant growth model

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= 19.00%

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2 years ago
David ungar holds a dunkin' donuts franchise. The terms of his franchise agreement require him to use only those ingredients fur
Andrej [43]

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To conclude,David may not be wrong with his idea but since dunkin' doughnuts is a big business with a good brand image...it has its' terms and requirements.

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