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3 years ago

What is the present value of the following cash flows at a discount rate of 9 percent?

Business

1 answer:

frutty [35]3 years ago

4 0

Answer:

Year 1 PV = 91,743.12

Year 2 PV =126,251.99

Year 3 PV = 154,436.70

Explanation:

The present value of future sum is the amount that ought to be invested today at interest rate compounded annually to equal the sum at the end of a particular period.

The present value of a future sum is given as follows:

PV = FV × PV (1+r)^(-n)

PV - present value

FV - Future value

r- interest rate

n- number of years

Year 1 PV = 100,000× 1.09^(-1) =91,743.12

Year 2 PV = 150,000× 1.09^(-2) =126,251.99

Year 3 PV = 200,000× 1.09^(-3) = 154,436.70

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General pharmacy’s stock has a beta of 1.8 and an expected return of 14%, and sicoras corp.’s stock has a beta of 1.5 and an exp

Shalnov [3]

Given:
General pharmacy’s stock has a beta of 1.8 and an expected return of 14%,
Sicoras corp.’s stock has a beta of 1.5 and an expected return of 16.2%.

Let Rf stand for risk free rate.
Let Rm stand for expected market return.

General Pharmacy: 14% = Rf + 1.8(Rm-Rf)
Sicoras Corp.: 16.2% = Rf + 1.5(Rm-Rf)

0.14 = Rf + 1.8Rm - 1.8Rf
0.14 = Rf - 1.8Rf + 1.8Rm
0.14 = -0.8Rf + 1.8Rm
0.14 + 0.8Rf = 1.8Rm

Rm = 0.14/1.8 + 0.8Rf/1.8
Rm = 0.078 + 0.444Rf

0.162 = Rf + 1.5(Rm-Rf)
0.162 = Rf + 1.5[(0.078+0.444Rf) - Rf]
0.162 = Rf + 0.117 + 0.666Rf - 1.5Rf
0.162 - 0.117 = Rf + 0.666Rf - 1.5Rf
0.045 = 0.166Rf
0.045/0.166 = Rf
0.271 = Rf

Rm = 0.078 + 0.444Rf
Rm = 0.078 + 0.444(0.271)
Rm = 0.078 + 0.120
Rm = 0.198

Rf = 27.1% ; Rm = 19.8%

The risk free rate is 27.1% and the expected market return is 19.8%.

To check, simply substitute the value of Rf and Rm in the above equation.

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3 years ago

Brian Cartwright is a single taxpayer who itemizes deductions and has no dependents. Since Year 1, Brian has owned a 50% interes

ankoles [38]

Answer:

Following are the solution to the given points:

Explanation:

For point 1:

$=\$22500\times 50\%\\\\=\$22500\times \frac{50}{100}\\\\=\$112500$

For point 2:

$=\$48000\times 50\%\\\\=\$48000\times \frac{50}{100}\\\\=\$24000$

For point 3:

$=\$5000\times 50\%\\\\=\$5000\times \frac{50}{100}\\\\=\$2500$

For point 4:

$=\$20000\times 50\%\\\\=\$20000\times \frac{50}{100}\\\\=\$10000$

For point 5:

$=\$40000\times 50\%\\\\=\$40000\times \frac{50}{100}\\\\=\$20000$

For point 6:

$=\$3000 \times 50\%\\\\=\$3000 \times \frac{50}{100}\\\\=\$1500$

For point 7:

$=\$6000\times 50\%\\\\=\$6000\times \frac{50}{100}\\\\=\$3000$

For point 8:

$=\$1000 \times 50\%\\\\=\$1000 \times \frac{50}{100}\\\\=\$500$

8 0

3 years ago

On March 31. 2019, Home Decorating Pavilion received a bank statement showing a balance of $9,810. The balance in the firm's che

NNADVOKAT [17]

Answer:

Both requirements 1 and 2 are the same, but I guess one refers to a bank reconciliation statement and the other one to a cash account reconciliation.

Bank account reconciliation:

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+ deposits in transit $2,935

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+ check deducted by mistake $590

reconciled bank account $11,110

Cash account reconciliation:

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+ note and interest collected $1,320

- bank fees ($31)

- NSF check Dane Jarls ($555)

+ error on check 341 $100

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Answer: More elastic; Lower

Explanation:

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Answer:

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3 years ago