All categories

3 years ago

The present value (PV) of an investment is ________.

Business

1 answer:

emmasim [6.3K]3 years ago

8 0

Answer:

Explanation:

Present Value relates to the amount that an investment would yield if the benefit were realized today. it is said to be the value of the future economic benefits an entity can generate

You might be interested in

Melissa is trying to decide between two digital cameras.

prohojiy [21]

Answer:

Buy Camera 2.

Explanation:

PACED, decision making process is used to make decisions when alternative options are available. In the given case Melissa has two option either to buy camera 1 or camera 2.

The steps for PACED decision making process are :

1. Define the Problem

2. List Alternatives

3. Identify Criteria

4. Evaluate Alternatives

5. Make a Decision

1. To buy Camera 1 or Camera 2

2. Camera 1 or Camera 2

3. Which ever camera has more features will be selected

4. Camera 2 has better features than camera 1

5. Buy Camera 2.

8 0

2 years ago

Susan put her savings into a mutual fund that paid a nominal interest rate of 3 percent a year at the beginning of 2005. The CPI

Kay [80]

Answer:

-0.11% a year

Explanation:

Susan's real interest rate is the nominal rate of her investment subtracted by the percentage increase in CPI.

The percentage increase in CPI for 2005 was:

$CPI = \frac{232-225}{225}*100 \% \\CPI= 3.11 \%$

Therefore, Susan's real interest rate (i) was:

$i = 3.00 - 3.11\\i = -0.11 \%$

4 0

3 years ago

How does corruption limit investment and economic growth? Instructions: In order to receive full credit, you must make a selecti

docker41 [41]

Answer:

Correct option are (1) and (3).

Tax revenues are often diverted to those in power instead of going into legitimate productive investment, and the same is sometimes true of foreign aid money from abroad.

Knowing that payments of graft must be made prevents many people from undertaking actions that might lead to growth.

Explanation:

In a corrupt economy, government incomes from charge and outside guide frequently are occupied to politically influential individuals as opposed to being contributed for gainful purposes. Since individuals realize that defilement cash needs to paid to concerned authorities, they don't attempt such profitable venture either. Both these variables identified with defilement limits speculation and development.

6 0

3 years ago

Which of the following statements is FALSE? A. According to the constant dividend growth model, the value of the firm depends

Vedmedyk [2.9K]

A. According to the constant dividend growth model, the value of the firm depends on the current dividend level, divided by the equity cost of capital plus the grow rate.

This is the false statement.

Explanation:

The fair value of stock can be calculated using the dividend growth model. While calculating the value of the stock, the growth of the dividends should be considered either in a stable rate or at a different rate during the period at hand.

The dividend growth model is also known as a valuation model as it is used to achieve the value of the stock.

Equity cost is the cost that the firm owes to the equity investors to compensate the risk of their investment.

4 0

2 years ago

Dakota Corporation decided to issue three-year bonds denominated in 5 million Russian rubles at par. The bonds have a coupon rat

sertanlavr [38]

Answer:

23.39%

Explanation:

From the given information, the amount was raised in rubies, Hence, we will convert them to dollars to be able to pay back the needed obligations.

However, according to the exchange rates, the IRR of dollar cash flow is the actual cost of financing that the company will address.

By applying the EXCEL FORMULA to compute the actual cost of financing, we get;

A B C D E

Coupon 17%

Year 0 1 2 3

Cashflow in

rubles 5,000,000 5000000*17% 5000000*17% 5000000+850

= 850000 = 850000 000

= 5850000

Exchange $0.30 $0.032 $0.034 $0.035

rate

(per rubles) 5,000,000 5,000,000 5,000,000 5,000,000

Cash flow × 0.03 × 0.032 × 0.034 × 0.035

in dollars = $150000.00 27200.00 28900.00 204750.00

IRR 23.39%

8 0

3 years ago

The present value​ (PV) of an investment is​ ________.

The present value (PV) of an investment is ________.