Chapter 6 Discounted Cash Flow Valuation (Continue)

Your grandfather left you an inheritance that will provide an annual income for another a decade. 3,000. Every year after that, the payment amount increase by 6 percent. Today if you can earn 9 What is your inheritance worthy of for you.5 percent on your investments? Learning Objective: 06-02 How loan payments are determined and where to find the interest rate on financing.

You just gained a nationwide sweepstakes! For your prize, you opted to receive never-ending payments. 12,12 months from today 500 and you will be paid one. Every year thereafter, the obligations shall increase by 3.5 percent annually. What’s the present value of your award at a discount rate of 8 percent? Learning Objective: 06-02 How loan obligations are computed and how to find the interest on financing.

A rich benefactor just donated some money to the local college. This gift was set up to provide scholarships for valuable students. 35,000. Thereafter Annually, the scholarship amount will be increased by 5.5 percent to help offset the effects of inflation. The scholarship finance can last indefinitely. Today at a discount rate of 9 percent, What is the value of this gift? Learning Objective: 06-02 How loan payments are calculated and how to find the interest rate on financing. Southern Tours is considering acquiring Holiday Vacations.

  • The customer discovers what they need as we go
  • Should you be estimating top down, bottom up or someplace in between
  • Data Quality
  • 7 years ago from Idaho
  • Help with accessing market information and the development of marketing programs

245,000 over the next 3 years, respectively. After that right time, they feel the business will be worthless. Southern Tours has determined a 13.5-percent rate of comeback is applicable to this potential acquisition. Today to acquire Vacation Holidays What is Southern Travels preparing to pay? Learning Objective: 06-01 How to determine the future and present value of investments with multiple cash flows.

You are thinking about two cost savings options. Both options offer a 7.4-percent rate of return. 3,000 by the end of each calendar year for another three years, respectively. Today The other option is to save one lump amount. Learning Objective: 06-01 How to determine the near future and present value of investments with multiple cash flows.

Your parents have made you two offers. 12,000 at the ultimate end of each of the next three years, respectively. Today The other offer is the payment of 1 lump amount. You are trying to determine which offer to simply accept given the known truth that your discount rate is 8 percent.

What is the minimal amount that you’ll acknowledge today if you are to select the lump-sum offer? Learning Objective: 06-01 How to determine the near future and present value of assets with multiple cash moves. You are considering changing careers. Your goal is to work for three years and then go back to school full-time in pursuit of an advanced degree.

46,000 a season for the next three years, respectively. All salary obligations are made as lump-sum obligations by the end of each year. 3,000 payable immediately. Today at a discount rate of 6 What is this offer value to you.75 percent? Learning Objective: 06-01 How to determine the near future and present value of purchases with multiple cash flows. 8,000 at the end of each year for the next 3 years, respectively. What is the present value of the cash flows, given a 9 percent discount rate?