Question
Hi please can you solve this questions I want to check my work. please show how you get the answers. thanks Question 20 A diamond
Hi please can you solve this questions I want to check my work. please show how you get the answers. thanks
Question 20
A diamond mine is expected to produce regular annual cash flows of $1 million for 8 years with the first regular cash flow expected in 1 year from today. In addition to the regular cash flows of $1,000,000, the diamond mine is also expected to produce an extra cash flow of $3,000,000 in 8 years from today. The cost of capital for the mine is 12 percent. What is the value of the mine?
Question 21
Bob has an investment worth $300,000. The investment will make a special payment of X to Bob in 2 years from today. The investment also will make regular, fixed annual payments of $65,000 to Bob with the first of these payments made to Bob in 1 year from today and the last of these annual payments made to Bob in 6 years from today. The expected return for the investment is 10 percent per year. What is X, the amount of the special payment that will be made to Bob in 2 years?
Question 17
Sarah owns a(n) climbing wall that is worth 147,911 dollars and is expected to make annual cash flows forever. The cost of capital for the climbing wall is 12.53 percent. The next annual cash flow is expected in 1 year and is expected to be 10,620 dollars. All subsequent cash flows are expected to grow annually at a constant growth rate. What is the cash flow produced by the climbing wall in 6 years expected to be?
Question 18
Cara owns two investments, A and B, that have a combined total value of 101,045 dollars. Investment A is expected to pay 5,393 dollars per year forever; its next payment is expected in 1 year; and its expected return is 5.93 percent per year. Investment B is also expected to make annual payments forever and make its next payment in 1 year. Investment Bs next payment is expected to be 1,508 and all subsequent payments are expected to grow by 3.05 percent per year forever. What is the annual expected return for investment B? Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.
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