If nominal GDP in 2014 is $20,000 billion while real GDP is $16,000 billion, then the GDP deflator in 2014 is
1 answer:
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Answer:
4.82 percent
Explanation:
We use the Rate formula in this question that is shown in the attachment
The NPER is the period of time.
Provided that,
Present value = $1,000 × 101% = $1,010
Assuming figure - Future value or Face value = $1,000
PMT = 1,000 × 7.5% ÷ 2 = $37.5
NPER = 30 years - 6 years = 24 year × 2 = 48 years
The formula is presented below:
= Rate(NPER;PMT;-PV;FV;type)
The present value come in negative
So, after solving this,
1. The pretax cost of debt is 7.41%
2. And, the after tax cost of debt would be
= Pretax cost of debt × ( 1 - tax rate)
= 7.41% × ( 1 - 0.35)
= 4.82%
Answer:
With mitigation: NPV =$36,670,000, IRR= 15,24%
Without mitigation: NPV= $ 42,000,000, IRR= 19,86%
Explanation:
To calculate the Net Present Value (NPV) we have to sum the present value of a project´s cash flows (positive and negative cashflows). To do so, we need: the number of periods of the project, the discount rate, cost of captal or WACC, and the future values of the cash flows. Then we apply the formula attached.
To calculate the Internal Rate of Return (IRR) we have to find the discount rate, cost of capital or WACC that makes the NPV equal to cero. That means we have to find a rate in which the investor do not create or destroy value, only recovers the investment. I attached the formula.
But, this is better if we use excel:
First we copy the cash flows of the two projects. To find the NPV we use the financial formula "NPV" in this way:
"=NPV(rate;cash flows from year 1 to year 5)+ cash flow of year 0"
To find the IRR we use the financial formula "IRR" in this way:
"=IRR(cash flows from year 0 to year 5)"
I attached the excel figure.
