Question

Asked Oct 3, 2019

69 views

Step 1

Calculation of Present values when Selling Price of the unit is $10,000 and Firms enter into the market.

Calculation of present values at various discount rates using excel:

Step 2

The result of the above:

**Conclusion:**

When profits are changing every 2 years, then present value of profits are decreasing as the intrest rates are increasing.

Step 3

Calculation of Present values when Selling price per unit is $7,000 and no firms can enter int...

Tagged in

Find answers to questions asked by student like you

Show more Q&A

Q: Current ratio = 2.6 timesProfit margin = 10%Sales = $1,270mROE = 10%Long-term debt to Long-term debt...

A: Calculate the current assets as follows:

Q: Assume the following information for a car note: Original loan amount = $23,500 Annual interest rate...

A: Calculation of Principal Balance:The principal balance on the loan after six months is $17,939.55.Ex...

Q: What is the future value of a 7%, 5-year ordinary annuity that pays $300 each year? If this were an ...

A: Calculation of future value of annuity:

Q: How do you calculate ''Net increase in cash" & "Cash End of the year" for the statement of Cash ...

A: The statement of cash flow shows the inflow and outflow of cash in a firm. It is important because i...

Q: What is crypto?

A: A crypto is a currency which is internet based medium of exchange uses to conduct the financial tran...

Q: Yu plan to deposit $1,000 in Year 1, $1,200 in Year 2 and $2,000 in Year 4 in your savings account. ...

A: We will have to figure out the future value of each of the series of cash flows and add them to get ...

Q: Integrative—Risk and Valuation Given the following information for the stock of Foster Company, c...

A: Computation of expected rate of return:Answer: The risk premium is 7.81%

Q: Last year, Hassan’s Madhatter, Inc. had an ROA of 9 percent, a profit margin of 14.70 percent, and s...

A: ROA = Net income / Total assets = 9%Profit margin = Net income / Sales = 14.70%Sales = $ 30 million

Q: At time t you own one stock that pays no dividends, and observe that F(t, T) < St/Z(t, T). What a...

A: Arbitrage is the act of an arbitrageur where the person buys or sells at the same time in similar as...