Answer: $126,613
Explanation:
Net Present value of Project A is:
= Present value of $50,000 annuity + Present value of residual value - Initial investment
Present value of $50,000 annuity:
= 50,000 * ( 1 - ( 1 + rate)^-number of periods) / rate
= 50,000 * ( 1 - ( 1 + 12%) ⁻⁸) / 12%
= $248,382
Present value of residual value:
= 8,000 / ( 1 + 12%)⁸
= $3,231
Net present value
= 248,382 + 3,231 - 125,000
= $126,613
Answer:
PV $19,242.04
Explanation:
We will calculate the present value of an annuity using our cost of capital
C 309
time 72
rate 0.004083333 (A)
PV $19,242.04
This will be the present value of the lease at our capital rate.
<em>Notes</em>
(A)The payment are on a monthly basis, so the interest rate must be monthly to. For that we divide the 4.9 percent which is annual by 12
That way the time and rate are on the same metric.
Establishing a motive for the group to listen.
By giving the students a question that they would need or love to have the answer to she is giving them a reason (or motive) to continue paying attention to her presentation in order to learn the answer.
Answer:
5.75%
Explanation:
the required rate of return for a preferred stock can be calculated by dividing the preferred dividend by the current market price:
- required rate of return = $5.35 / $93 = 5.75%
The preferred dividend is fixed, but the market price varies depending on the required rate of return.