Answer:
NPV = $40,952.46
Explanation:
Net present value is the present value of after tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
Cash flow in year 0 = $-28,000
Cash flow in year 1 to 3 = $32,500 - $2,800 = $29,700
I =14%
NPV = $40,952.46
To find the NPV using a financial calacutor:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
I hope my answer helps you
Answer:
$100
Explanation:
The inherent value of a share or option or any other asset which an investor expects to have. In options it refers to the difference between it's current and the strike price.
The intrinsic value of options is calculated using the following formula:
Intrinsic value of option = Number of share options × ( Market price of the stock on the date of the grant - exercise price of the share option )
Intrinsic value of option = 100 × ( $10 - $9 )
Intrinsic value of option = 100 × $1
Intrinsic value of option = $100
So, the intrinsic value of the call option at the time of the initial investment was $100.
Answer:
The Net Present Value (NPV) of this project is <u>$93,405.59</u>.
Explanation:
Note: Find attached the excel file for the calculation of the NPV of this project.
Net present value (NPV) refers to the present value of cash inflows minus the present value of cash outflows over a specified period of time.
On its own, present value (PV) refers the value that a future sum of money or stream of cash flows has now or currently given a specified rate of return. The formula for calculating the PV is given as follows:
PV = FV / (1 + r)^n
Where,
FV = Future value
r = discount rate. This is given as 10% in this question
n = Relevant period, e.g. year
The above explanation and formula together with other stated formulae in the attached excel file is used in calculating the NPV of this project.
Answer: $1531
Explanation:
The corporation's tax basis in the property received in the exchange will be the addition of Tristan's Tax basis and the gain that's recognized on exchange by Tristan.
The gain realized will be:
= $1,570 - $1,255
= $315
Boot received = $276
Therefore, lower of $315 or $276 is $276.
The corporation's tax basis in the property received will then be:
= $1255 + $276
= $1531
Answer:
c. might increase or decrease
Explanation:
Equilibrium price is the price at which quantity demanded equals quantity supplied in a competitive market.
Producer surplus is the excess of revenue realized from the sales of the equilibrium quantity at a price higher than the equilibrium price.
The producer surplus may increase or decrease. It may increase if the quantity demanded, do not decrease. It may decrease if the quantity demanded, decreases.
