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emmainna [20.7K]
4 years ago
14

A business promises to pay the investor of $6000 today for a payment of $1500 in one year's time, $3000 in two years' time, and

$3000 in three years' time. What is the present value of this business opportunity if the interest rate is 6% per year
Business
2 answers:
barxatty [35]4 years ago
6 0

Answer:

NPV= 603.94

Explanation:

Giving the following information:

A business promises to pay the investor of $6000 today for a payment of $1500 in one year, $3000 in two years, and $3000 in three years.

We need to calculate the net present value using the following formula:

NPV= -Io + ∑[Cf/(1+i)^n]

Cf= cash flow

For example:

Year 2= 3,000/1.06^2= $2,669.99

NPV= 603.94

White raven [17]4 years ago
3 0

Answer:

The business sounds good as the net present value is positive.

NPV $603.94

Explanation:

we have to solve for the present value of the discount values of the cash flow:

PV = \frac{1500}{1+0.06} + \frac{3000}{(1+0.06)^2} +\frac{3000}{(1+0.06)^3}

PV = 6603.941509

Net present value

6,603.94 - 6,000 investment (amount borrowed to the business)

603.94

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Marina CMI [18]

Answer:

23.16%

Explanation:

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total flotation costs including direct and indirect costs = [($26.30 - $21.39) x 7,500,000] + $1,350,000 + $210,000 = $38,385,000

flotation costs as a percentage of funds raised = $38,385,000 / $165,772,500 = 0.2316 = 23.16%

4 0
3 years ago
Jane's Donut Co. borrowed $198,000 on January 1, 2018, and signed a two-year note bearing interest at 14%. Interest is payable i
Virty [35]

Answer:

$27,720

Explanation:

The computation of the interest expense

= Principal amount × rate of interest × number of months ÷ (total number of months in a year)  

= $198,000 × 14% × (12 months ÷ 12 months)

= $27,720

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7 0
3 years ago
What is the incremental percentage paid on income taxes called?
Westkost [7]

What is the incremental percentage paid on income taxes called The marginal tax rate

For better understanding, lets explain marginal tax rate

  • Marginal tax rate is simply referred to as the increase in taxes as a percentage of the increase in income. That is the change in the tax payment is divided by the change in income.

  • Marginal tax rate = Change in taxes due/change in taxable income

from the above, we can therefore say that the answer What is the incremental percentage paid on income taxes called marginal tax rate

Learn more about marginal tax rate from:

brainly.com/question/23568955

7 0
3 years ago
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inessss [21]

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$812.20

Explanation:

Given the following bond characteristic:

Coupon rate = 12%

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This means that the sum of the present value of all likely coupon payment and par at maturity. It is simply the present value of all cash streams it is projected to generate.

6 0
3 years ago
Daniel has an excellent idea to increase productivity on his assembly line. However, the original idea he sent to his superiors
docker41 [41]

Answer: Upward distortion

Explanation:    

 According to the given question, Daniel gave an excellent idea for his organization that helps in increase the productivity and the growth of the company.

The Daniel's original ideas sent to the manager and the superior of the company and then at that level his idea star filtering and become ineffectual and this occurrence is called as upward distortion.

In an organization their is occurrence of distortion in the upward level of communication and the information or message get distorted. Therefore, Upward distortion is the correct answer.      

   

5 0
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