FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

An investment requires 35,000 today, and produces an yearly cash flow of 3000 in perpetuity. Cash flow is expected to grow at 3% a year.

  1. An investment requires 35,000 today, and produces an yearly cash flow of 3000 in perpetuity. Cash flow is expected to grow at 3% a year.
    1. What is the NPV of this investment if the discount rate is 8% ?
    2. What is the rate of return of this investment?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions

Question

What do you think the natural cause of your problem is?

Answered: 1 week ago

Question

★★★★★
Central Hospital in York, Pennsylvania, has an emergency room that is divided into six departments: (1) An initial exam station to treat minor problems or to make a diagnosis; (2) An X- ray...

Answered: 1 week ago

Question

★★★★★
Espresso Express operates a number of espresso coffee stands in busy suburban malls. The fixed weekly expense of a coffee stand is $1,200 and the variable cost per cup of coffee served is $0.69....

Answered: 1 week ago

Question

★★★★★
aele to use televant examples to support your anseers d) Cieaxty define and explain with rekevant examples 'oncmeratod and inpleted Pousers' gien to congrets. (3 Points) Please be abie to use...

Answered: 1 week ago

Question

★★★★★
Consider a contingency table of observed frequencies with seven rows and five columns. a) How many chi-square degrees of freedom are associated with this table? b) What is the chi-square critical...

Answered: 1 week ago

Question

★★★★★
If a medical screening test to detect a disease whose prevalence is 10/100 has 90% hit rate (rate at which positive results are given for positive cases) and 10% false alarm rate (rate at which...

Answered: 1 week ago

Question

★★★★★
Based on these concepts below, provide some literature reviews that can support these concepts. Supply and demand: This concept refers to the relationship between the quantity of a product that...

Answered: 1 week ago

Question

★★★★★
Question 3 This question applies to parts 1-10. It contains drop-down multiple choice and numerical questions. Not answered Consider a world in which there are only two dates: 0 and 1. At date 1...

Answered: 1 week ago

Question

★★★★★
Why is the ability to be persuasive in communicating verbally or in written form as important as ever at work?Explain

Answered: 1 week ago

Previous Question Next Question