All categories

2 years ago

The appropriate discount rate for the following cash flows is 7.38 percent per year.

Business

1 answer:

Kaylis [27]2 years ago

6 0

Answer:

Present value = $7107.76379 rounded off to $7107.76

Explanation:

The present value of cash flows can be calculated by discounting each of the cash flow back to today's value and summing them up. The present value of the cash flows can be calculated using the following formula,

Present Value = CF1 / (1+r) + CF2 / (1+r)^2 + .... + CFn / (1+r)^n

Where,

n is the total number of periods
CF represents the cash flow in each year
r is the discount rate

Present value = 2480 / (1+0.0738) + 0 + 3920 / (1+0.0738)^3 +

2170 / (1+0.0738)^4

Present value = $7107.76379 rounded off to $7107.76

You might be interested in

With the standard burger without a bun, the bottom bun items go on the _____ and the top bun items go on the ______

Olegator [25]

With the standard burger without a bun, the bottom bun items go on the right and the top bun items go on the left.

Place the baking sheet in the oven or toaster and close the door. Keep an eye on the buns and remove them after 30 seconds or when they begin to brown.

French fries should be cooked for about two and a half to three minutes. Shake the frying basket well before dipping it into the oil. Shake regularly to prevent sticking.

Burger "all the way" order includes lettuce, pickles, tomatoes, grilled onions, grilled mushrooms, ketchup, mustard, and mayonnaise.

Learn more bout

brainly.com/question/22264373

#SPJ4

6 0

1 year ago

J Corp. common stock is priced at $36.50 per share. The company just paid its $0.50 quarterly dividend. Interest rates are 6.0%.

viva [34]

Answer:

Explanation:

The time (T) = 6 months = 6/12 years = 0.5 years

Interest rate (r) = 6% = 0.06

The stock is priced [S(0)] = $36.50

The price the stock sells at 6 months ( $V_c$ ) = $3.20

European call (K) = $35

The price (P) is given by:

$P=V_c+K.e^{-rT}-S(0)+Dividends\\But, Dividends = 0.5*e^{-0.25*0.06}+ 0.5*e^{-0.5*0.06}\\Therefore, P=V_c+K.e^{-rT}-S(0)+0.5*e^{-0.25*0.06}+ 0.5*e^{-0.5*0.06}\\Substituting:\\P=3.2+35*e^{-0.06*0.5}-36.5+0.5*e^{-0.25*0.06}+ 0.5*e^{-0.5*0.06}\\P=3.2+33.9656-36.5+0.4926+0.4852\\P=1.64$

The price of a 6-month, $35.00 strike put option is $1.65

5 0

3 years ago

A higher earnings per share (eps) does not necessarily translate into a higher stock price

nikdorinn [45]

This doesn't seem to be a question, but rather, a statement.

4 0

3 years ago

the clause in a mortgage that best describes the requirement of the mortgagee to execute a satisfaction of mortgage when the not

pashok25 [27]

The clause in a mortgage that best describes the requirement of the mortgagee to execute a satisfaction of mortgage when the note has been fully paid is <u>defeasance</u>

<u></u>

<h3>What Is Defeasance?</h3>

When the borrower sets aside cash or bonds big enough to pay the obligation, the contract's defeasance clause renders the bond or loan worthless on the balance sheet. The outstanding debt and cash balance on the balance sheet are equal, thus they do not need to be reported because the borrower sets aside funds to pay down the bonds.

Buying commercial real estate is one instance of using defeasance. Due to commitments to bondholders having a stake in the commercial mortgage-backed securities (CMBS) that houses the loan, commercial loans may have hefty prepayment penalties in contrast to home mortgages.

To learn more about defeasance from given link

brainly.com/question/17253783

#SPJ4

5 0

2 years ago

Milio is having coffee in a coffee house when he sees jordan, who is the dean of a midwest business school. milio used to teach

sladkih [1.3K]

Based on the scenario, it is considered to be false. The school of Jordan won’t be sued for tortious interference with existing contractual relationship because it doesn’t even prove that the person involved had intentionally damage one’s contractual or business relationship of which Jordan didn’t even engaged to.

5 0

3 years ago

Read 2 more answers