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

Question

1 Approved Answer

The discount rate used to discount future cash flows should: a. Be equal to yield on long-term U.S. Treasuries. b. Be 2% greater than yield

image text in transcribed
The discount rate used to discount future cash flows should: a. Be equal to yield on long-term U.S. Treasuries. b. Be 2\% greater than yield on long-term U.S. Treasuries. c. Incorporate a risk premium equal to perceived risks and volatility of future cash flow stream. d. Usually will be 1% greater than yield on high-yield bonds

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

Short Term Financial Management

Short Term Financial Management

Authors: Terry S. Maness, John T. Zietlow

2nd Edition

ISBN: 0030315131, 978-0030315138

More Books

Students also viewed these Finance questions

Question

★★★★★
Sample 8 of Problem 4 - 3 was analyzed seven times, with x- 1.52793 and s = 0.00007. Find the 99% confidence interval for sample 8.

Answered: 1 week ago

Question

★★★★★
1. (Ignore income taxes in this problem.) Sibble Corporation is considering the purchase of a machine that would cost $460,000 and would last for 6 years. At the end of 6 years, the machine would...

Answered: 1 week ago

Question

★★★★★
Maher Saddles, Inc., produces bicycle seats. Among the many seats produced is one for the high-end mountain bicycle market. Mahers operation manager has recently made a change in the production...

Answered: 1 week ago

Question

★★★★★
Precision Tools sells a line of high-quality woodworking tools. When customers place orders on the companys Web site, the system checks to see if the items are in stock, issues a status message to...

Answered: 1 week ago

Question

★★★★★
The discount rate used to discount future cash flows should: a. Be equal to yield on long-term U.S. Treasuries. b. Be 2\% greater than yield on long-term U.S. Treasuries. c. Incorporate a risk...

Answered: 1 week ago

Question

★★★★★
Frederickson Office Supplies recently reported $10,000 of sales, $7,250 of operating costs other than depreciation, and $1,250 of depreciation. The company had no amortization charges and no...

Answered: 1 week ago

Question

★★★★★
Exhibit 6-10 Midwest Office Products: Five Orders ORDER Price Acquisition cost 1 2 3 4 5 $610 $634 $6,100 Number of cartons in order $6,340 $6,100 500 500 5,000 5,000 5,000 Manual order Number of...

Answered: 1 week ago

Question

★★★★★
Use the moment Distribution Method to determine the bending moments at supports A, B and C for the continuous beam loaded as shown below. The beam has a constant cross- section. w=2k/ft 178 A 8' P=6K...

Answered: 1 week ago

Question

★★★★★
The average student loan debt is reported to be $25,235. A student belives that the student loan debt is higher in her area. She takes a random sample of 100 college students in her area and...

Answered: 1 week ago

Question

★★★★★
A coffee house finds that its weekly profit P (measured in dollars) as a function of the price x (measured in dollars) it charges per cup of coffee is given by the function m, defined by m(x) = -300x...

Answered: 1 week ago

Question

★★★★★
Who are the Public-private partners involved in the Downtown Commercial & Residential Building Improvement Program in the City of Orlando? What Nonprofits are involved in the Downtown Commercial &...

Answered: 1 week ago

Question

★★★★★
e. What do you know about your ethnic background?

Answered: 1 week ago

Question

★★★★★
a. What values did your parents or guardians attempt to instill in you?

Answered: 1 week ago

Question

★★★★★
b. Why were these values considered important?

Answered: 1 week ago

Previous QuestionNext Question