Question
A) Pablo has an investment worth 377,221 dollars. The investment will make a special payment of X dollars to Pablo in 2 month(s) and the
A) Pablo has an investment worth 377,221 dollars. The investment will make a special payment of X dollars to Pablo in 2 month(s) and the investment also will make regular, fixed monthly payments of 5,590 dollars to Pablo forever. The expected return for the investment is 1.53 percent per month and the first regular, fixed monthly payment of 5,590 dollars will be made to Pablo in 1 month. What is X, the amount of the special payment that will be made to Pablo in 2 month(s)?
B) An investment is expected to generate annual cash flows forever. The first annual cash flow is expected in 1 year and all subsequent annual cash flows are expected to grow at a constant rate annually. We know that the cash flow expected in 2 year(s) from today is expected to be 1,320 dollars and the cash flow expected in 9 years from today is expected to be 2,750 dollars. What is the cash flow expected to be in 5 years from today?
C) An investment, which has an expected return of 17.25 percent, is expected to make annual cash flows forever. The first annual cash flow is expected in 1 year and all subsequent annual cash flows are expected to grow at a constant rate of 2.79 percent per year. The cash flow in 1 year from today is expected to be 16,820 dollars. What is the present value (as of today) of the cash flow that is expected to be made in 6 years?
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