An investment that requires $3000 initial investment will return $1000 at the end of first year, $2000 at the end of second year, and $3000 at the end of third year. Assume the discount rate is continuously compounded at 10%. What is the Net Present Value of the investment

Q: Consider the following information for an internal rate of return calculatoin.  Projected cash flow…

A: The internal rate of return is the rate at which the NPV of the project is zero, which means no…

Q: An analyst has the following projected free cash flows for an investment: Year 1: $125,050; Year 2:…

A: Present value of an investment refers to the current value of a future stream of cash flows or…

Q: You are considering an investment project with the cash flows of -300 (the initial cash flow), 800…

A: MIRR means Modified Internal Rate of Return .It is calculated as follows:-MIRR =  - 1where,FV =…

Q: The cash flows for an investment with an economic life of 5 years are as follows: k0 = -7000, k1 =…

A:

Q: How much is the sum of the present value of the expected return over those periods

A: Cash Flows (Year 1-10) (CF) =  $15,000 per year Annual interest rate (r) = 5% Time Period (t) = 10…

Q: What is the present value of your-end-of-year investment of $1000 per year, with the first cash flow…

A:

Q: An investment pays an annual cash flow of $1 forever. The appropriate discount rate is 4% per year.…

A: Annual cash flow (C) = $1Discount rate (r) = 0.04Present value = ?Present value will be the…

Q: An investment of $100 produces rate of return as follows In year 1: a gain of 10 percent In year 2:…

A: Given:Investment amount=$100Return is as follows:Year 1=+10%Year 2=-5%Year 3 =-8%Year 4=+3%To…

Q: You have a certain investment with the shown cash flow diagram. The investment rate is 15% and the…

A: To Find: Value of X

Q: Dundonald Inc. has identified an investment project with the following cash flows. If the discount…

A: Future value of stream of uneven cash flows at different discount rate is calculated in excel

Q: an investment that makes 20% one year and loses 20% the next yea following returns for this…

A:

Q: Compute the Payback Period, Discounted Payback Period, Net Present Value, Internal Rate of Return,…

A: Capital projects are those that are spread across several years and requires a significant initial…

Q: An investment is expected to generate cash flows of $20,000 next year (at time t=1), and $10,000 in…

A: Given: Year Particulars Amount 1 Cash inflows $20,000 2 Cash inflows $10,000   Growth rate…

Q: a)Calculate the intemal rate of retum (IRR) of the following cash flow. Determine if this is a good…

A: IRR is rate that makes present value(PV) of inflows and outflows of proposal equal whereas ERR is…

Q: An investment will pay you $83,000 in five years. Assume the appropriate discount rate is 6.75…

A: The concept of time value of money will be used to solve this question.   We need to find the…

Q: sent worth of income from an investment that follows an arithmetic gradient was projected to be P…

A: Gradient mean that there is constant growth of annuity by the fixed interval and in this we need to…

Q: What is the present value of your end-of-year investment of $1,000 per year, with the first cash…

A: According to the time value concept, the purchasing power of a sum of money today is more than the…

Q: What is the dollar-weighted return on a $100 investment that generates annual returns of $20, $15,…

A: Return is that portion which a person receives over the investment amount during the whole period.…

Q: An investment will pay you $100,000 in 10 years. If the appropriate discount rate is 6 percent…

A: Future value = fv = $100,000 Time = t = 10 * 365 = 3650 days discount rate = r = (1 + (0.06 / 365))…

Q: An investment promises two payments of $700, on dates two and four months from today. If the…

A: The present value is the current value of future cash flows. Investors and money lenders use this…

Q: An investment costs $100 and it promises $50 in 3, 4, 5, 6 and 7 years.  What is the return of this…

A: The return on investment is a financial metric used to find out whether the investment will give a…

Q: saver wants $100000 after 10 years and believes it is possible to earn an annual rate of 8% on…

A: Amount required = FV = $100,000No of years = nper = 10 yearsInterest rate = rate = 8%Yearly…

Q: A firm expects to make payments of 1.1, 1.5, 1.2, 1.4 and 1.9 million for a particular supply over…

A: Solution:- Present value means the value in today’s terms after discounting the future cash flows to…

Q: Draw a cash flow diagram of any investment that exhibits both of the following properties: The…

A: Cash flow diagrams are used to depict the inflows and outflows of cash over the lifetime of a…

Q: Suppose you save $2,800 ayear for 43 years into an investment account that earns 8.5% return, how…

A: Yearly savings = $2800Period = 43 yearsInterest rate = 8.5%

Q: How much is an asset with expected annual cashflows of $19,000 for 11 years worth today, if the…

A: Present value considers the time value of money concept. It considers the discounting factor at…

Q: Calculate the duration for the following cash flows of an investment. Given the market interest…

A: Year Cash flow 0 0 1 140 2 150 3 160 4 170 5 180 6 190 7 200 8 250 Interest…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.