Sign In
Not register? Register Now!
Essay Available:
You are here: HomeCourseworkAccounting, Finance, SPSS
2 pages/≈1100 words
7 Sources
Accounting, Finance, SPSS
English (U.S.)
MS Word
Total cost:
$ 22.46

Net present value Accounting, Finance, SPSS Coursework (Coursework Sample)


NPV and discounted cash flow questions


Contents TOC \o "1-3" \h \z \u Question 1: PAGEREF _Toc44104048 \h 1Question 2: PAGEREF _Toc44104049 \h 3Question 3: PAGEREF _Toc44104050 \h 6Refernces: PAGEREF _Toc44104051 \h 8
Question 1:
* A company expects a series of 24 monthly receipts of $3,600 each. The first payment will be received 1 month from today. Determine the present value of this series assuming an interest rate of 12% per year compounded semiannually.
P=PMT(1-(1+r) ^-n/r)
PMT= Cash flow
P = Periodic payment
r = Rate per period
n = Number of period
For compounded semiannually we have to make annual interest rate into semiannual by 12%/2 = 6%
P = 3600*(1-(1+6%)^-24/0.06)
P = 3600*(1-0.2470)/0.06
P = 3600* (0.7530/0.06)
P = 3600* 12.55
P = $45181.29 (Bracker, Lin and Pursley, 2020)
* A company is considering starting a new product line. The new product line requires the installation of new machines and equipment. For this purpose, company wants to borrow money by issuing bonds of $10,000 for 12-year period. The interest on these bonds is to be paid at a rate of 10% per year. Compute the amount of interest to be paid to bondholders over 12-year period:
a) if the simple interest is charged.
b) If the interest is compounded annually.
a) if the simple interest is charged:
Issue price of bond = $10,000
Period = 12 years
Interest rate = 10%
Amount of interest to be paid over 12 years’ period = $10,000*10%*12 = $12,000
b) If the interest is compounded annually:
For this we shall compute compound amount by using compound amount formula then, later on, we shall compute compound interest directly deducting the compound amount from the principal amount.
S = P (1 + i) n
= $10,000 × (1 + 10%)12
=$10,000 × 3.138
= $31,384.28
Interest to be earned over 12-year period: $31,384 – $10,000 = $21,384
* ANB ltd has common equity of $35.5mn and $31.9mn of long-term debt and $10.3mn of preferred equity on its books. Required return on these funds are 12%, 8%, and 10%, respectively. Market values of the common equity and long-term debt are $46.6mn and $35mn, respectively. Market value of preferred equity is the same as its book value. Estimate WACC for the company given that its effective tax rate is 30%.
WACC = E/V*Re + D/V*Rd(1-t) + P/V*Rp
WACC = $46.6/91.9*35.5 + $35/19.9*31.9(1-30%) + $10.3/91.9

Get the Whole Paper!
Not exactly what you need?
Do you need a custom essay? Order right now:

Other Topics:

  • Financial Analysis Of Quartz Antique Furniture Finance Coursework
    Description: In financial analysis of organizations, income statements present financial information that indicates whether organizations are making significant profits or they are incurring losses. Income statements capture financial data for a specific period that can be compared with past financial performance...
    9 pages/≈2475 words| 8 Sources | APA | Accounting, Finance, SPSS | Coursework |
  • Accounting Review Process. Accounting, Finance, SPSS Coursework
    Description: You are required to attempt all the questions listed below. Describe in your own words what is a review process and why financial advisers are required to carry out this process regularly?...
    2 pages/≈550 words| 4 Sources | APA | Accounting, Finance, SPSS | Coursework |
  • Taxing the Rich Accounting, Finance, SPSS Coursework
    Description: In his article, “a better way to tax the rich,” Steven Rattner agrees with Ms. Alexandria Ocasio-Cortex’s idea of raising the top tax rate but suggests that there are other better ways to tax the wealthy. He argues that Ms. Ocasio-Cortex proposal ignores the state and local tax burden to the residents...
    4 pages/≈1100 words| 4 Sources | APA | Accounting, Finance, SPSS | Coursework |
Need a Custom Essay Written?
First time 15% Discount!