Holly plc expects to receive annual cash flows of £75,000 per year in current price terms for a period of five years. Annual inflation is expected to be 4 percent and the cost of capital of the company is 10 percent in nominal terms. What is the present value of the expected cash flows (to the nearest £1,000)? A) £318,000 B) £306,000 C) £375,000 D) £296,000
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6) Holly plc expects to receive annual cash flows of £75,000 per year in current price terms for a period of five years. Annual inflation is expected to be 4 percent and the cost of capital of the company is 10 percent in nominal terms. What is the
A) £318,000
B) £306,000
C) £375,000
D) £296,000
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- Today (n=0), a company invests $1,000 and expects that investment to grow 10% each period for the next six periods (n=6). What is the investment's expected future value?A company is considering an investment with the following expected cash flows, in constant dollars. The general inflation rate (7) during this project period is expected to be 5%. The company's market interest rate is 15%. What is the equivalent present worth of these cash flows at period 07 O $ 3,567 O $7,618 $ 4,248 O $6,927 $ 8,317 Year 0 1 2 3 Cash flow ($) -30,000 15,000 15,000 15,000determine the market value of 6 million of long-term debt, the parameters are that for 14 years, payments of 300,000 (5% of 6 million)will be made, concluding with a 15th year of payment of 6,300,000 (interest and principle) and that 12% is representative interest rate. what is the present value of the cash flows?
- 11) What is the rate of return on an investment of $124,090 if the company expects to receive $10,000 per year for the next 30 years?An investment, which is worth $54,000.00 and has an expected return of 11.80 percent, is expected to pay fixed annual cash flows for a given amount of time. The first annual cash flow is expected in 1 year from today and the last annual cash flow is expected in 6 years from today. What is the present value of the annual cash flow that is expected in 3 years from today? O $10,516.47 (plus or minus 10 dollars) O $13,059.88 (plus or minus 10 dollars) O $9,345.74 (plus or minus 10 dollars) O $11,681.46 (plus or minus 10 dollars) O none of the answers are within 10 dollars of the correct answer +An investment of $185,575 is expected to generate returns of $65,000 per year for each of the next four years. What is the investment’s internal rate of return? Below is a table for the present value of $1 at compound interest. Year 6% 10% 12% 15% 1 0.943 0.909 0.893 0.870 2 0.890 0.826 0.797 0.756 3 0.840 0.751 0.712 0.658 4 0.792 0.683 0.636 0.572 5 0.747 0.621 0.567 0.497 Below is a table for the present value of an annuity of $1 at compound interest. Year 6% 10% 12% 15% 1 0.943 0.909 0.893 0.870 2 1.833 1.736 1.690 1.626 3 2.673 2.487 2.402 2.283 4 3.465 3.170 3.037 2.855 5 4.212 3.791 3.605 3.353 fill in the blank 1 %
- An investment, which is worth $57,023.00 and has an expected return of 17.00 percent, is expected to pay fixed annual cash flows forever with the next annual cash flow expected in 1 year. What is the present value of the annual cash flow that is expected in 3 years from today? O $9,693.91 (plus or minus 3 dollars) O $35,603.48 (plus or minus 3 dollars) O $6,052.59 (plus or minus 3 dollars) O $8,285.39 (plus or minus 3 dollars) O none of the answers are within 3 dollars of the correct answerConsider a firm that expects to generate the following earnings stream over the next five years. The terminal value in Year 5 is based on a multiple of 15 times that year's earnings. Year 1 P50,000 Year 2 P60,000 Year 3 P65,000 Year 4 P70,000 Year 5 P750,000 (terminal value) Using a discount rate of 8%, what is the present value of the firm? What is the present value if the terminal value is based on 10 times Year 5 earnings?Gumtree Ltd will invest in an asset that is currently trading at $171,000. This is expected to generate a quarterly cash flow that grows at a constant rate of 6% p.a. compounded quarterly forever. The expected cost of capital is 10%p.a. compounded annually. How much would the first cash flow be from such an asset? Group of answer choices a. $1,107.52 b. $1,789.65 с. $1,558.44 d. $1,324.61 e. $1,961.37
- In 10 years a firm will have annual cash flows of 100 million. Thereafter, its cash flows will grow at an inflation rate of 3%. if the applicable interest rate is 8%, estimate its value if you will sell the firm in 10 years? what would this be worth today? show your workA set of cash flows begins at $60,000 and increases at 10% per annum for the next 12 years. If the interest rate is 10%, what is the present value of the set (to the nearest dollar)? Choose one Answer : O A. $650,545 O B. $604,545 O C. $654,545.C O D. $654,045(a)An investment is offered whereby £1000 is invested immediately, £2000 is invested in exactly threeyears’ time followed by a further investment of £3000 after a further threeyears. The investment is due to return £10000 in ten years’ from now. (i)Write down the equation of valuefor the investment (ii) Estimatethe yield on the investment. (b) (i)Calculate the present value, at a rate of interest of 6.5% per annum effective, of anannuity where £5000 is paidat the end of the first year, £4,800 is paid at the end ofthe second year, £4,600 is paid at the end of the third year and so on, with paymentsdecreasing by £200 per annum until the payment stream ends afterof 10 years. (ii)What would the payments be for an investment with the same present value, with equal payments every month?