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

Question

1 Approved Answer

The cost of capital is 5 percent, and a firm operates indefinitely. If the firm has a profit of $200M in each year, what is

The cost of capital is 5 percent, and a firm operates indefinitely. If the firm has a profit of $200M in each year, what is the present value of the sum of its profit stream? Answers: A. $4B B. $16B C. $20B D. None of the above are correct to the nearest cent

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

Recommended Textbook for

Microeconomics Theory And Applications With Calculus

Microeconomics Theory And Applications With Calculus

Authors: Jeffrey M. Perloff

4th Edition

134167384, 134167381, 978-0134167381

More Books

Students also viewed these Economics questions

Question

★★★★★
A bank branch located in a commercial district of a city has the business objective of developing an improved process for serving customers during the noon- to- 1: 00 p. m. lunch period. The waiting...

Answered: 1 week ago

Question

★★★★★
Ryan, Inc., uses straight-line depreciation for all of its depreciable assets. Ryan sold a used piece of machinery on December 31, 2012, that it purchased on January 1, 2011, for \(\$ 10,000\). The...

Answered: 1 week ago

Question

★★★★★
2. What types of graphical methods are available for describing this data set? What types of questions could be answered using various types of graphical techniques? Blood pressure is the pressure...

Answered: 1 week ago

Question

★★★★★
B, a chemist, was employed by A, a manufacturer, to work on a secret process for As product under an exclusive three-year contract. A employed C, a salesperson, on a week-to-week basis. B and C...

Answered: 1 week ago

Question

★★★★★
A local university received a $100,000.00 gift to establish an endowment fund for a student scholarship. The endowment fund earns interest at a rate of 6.00% compounded semi-annually. The university...

Answered: 1 week ago

Question

★★★★★
On August 1 , Neil Brothers bought goods with a list price of $ 1 5 , 8 0 0 , terms 2 1 0 , n 3 0 . The firm records purchases at invoice price, using the periodic inventory system. On August 5 ,...

Answered: 1 week ago

Question

★★★★★
If Neon Lights, LLC has gross receipts of $25 million for the taxable year, they will not be considered an SSTB if less than what percentage of their gross receipts are attributable to an SSTB...

Answered: 1 week ago

Question

★★★★★
The CFO of Spotify Inc. has summarized its free cash flows for the next three years in the following table. The cash flows are expected to grow at a constant growth rate 2.00% afterwards. The company...

Answered: 1 week ago

Question

★★★★★
The Department of Investments purchased a parcel of land for $160,000 and proceeded to pay $8,000 for sewage services, $12,000 to survey the land, and $15,000 to pave a driveway. If the property was...

Answered: 1 week ago

Question

★★★★★
Aaron Mechanic, CFA is responsible for valuing the shares of Duotronics Research Laboratories (DRL). The stock is currently trading at $8.75 and he gathers the following financial information about...

Answered: 1 week ago

Question

★★★★★
You have just been served with legal documents that suggest that you were scrubbed in on a procedure in which your patient was burned. You are charged with negligence. For what reasons could you be...

Answered: 1 week ago

Question

★★★★★
Normal Distribution: Operations and production managers often use the normal distribution as a probability model to forecast demand in order to determine inventory levels, manage the supply chain,...

Answered: 1 week ago

Question

★★★★★
11. Give two examples of each of the following heuristic assessment mechanisms. a) We use the information that is currently accessible. b) We assume an initial anchor point (value). c) We compare to...

Answered: 1 week ago

Question

★★★★★
4. Give an example of how the consistency principle can be used to influence others.

Answered: 1 week ago

Question

★★★★★
6. Give an example of how the liking principle can be used to influence others.

Answered: 1 week ago

Previous Question Next Question