Principles of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
12th Edition
ISBN: 9781259144387
Author: Richard A Brealey, Stewart C Myers, Franklin Allen
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 2, Problem 9PS
- a. Year 10 (at a discount rate of 1%)?
- b. Year 10 (at a discount rate of 13%)?
- c. Year 15 (at a discount rate of 25%)?
- d. Each of years 1 through 3 (at a discount rate of 12%)?
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11. Present values (2.1) What is the PV of $100 received in:
a. Year 10 (at a discount rate of 1%)?
b. Year 10 (at a discount rate of 13%)?
c. Year 15 (at a discount rate of 25%)?
1. Determine the discount rate assuming the PV of $1080 at the end of 1-year is $980?
Interest earned during the year will be:
a.
OMR 73,200,000
b.
OMR 132,600,000
c.
OMR 127,200,000
d.
OMR 48,800,000
Non-interest incomes will be:
a.
OMR 2,800,000
b.
OMR 2,400,000
c.
OMR 4,400,000
d.
OMR 4,200,000
Chapter 2 Solutions
Principles of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
Ch. 2 - (FV) In 1880, five aboriginal trackers were each...Ch. 2 - Prob. 2SQCh. 2 - (PV) Your company can lease a truck for 10,000 a...Ch. 2 - (RATE) Ford Motor stock was one of the victims of...Ch. 2 - Prob. 5SQCh. 2 - Prob. 6SQCh. 2 - Prob. 8SQCh. 2 - (NOMINAL) What monthly compounded interest rate...Ch. 2 - Future values If you invest 100 at an interest...Ch. 2 - Discount factors If the PV of 139 is 125, what is...
Ch. 2 - Prob. 3PSCh. 2 - Prob. 4PSCh. 2 - Opportunity cost of capital Which of the following...Ch. 2 - Perpetuities An investment costs 1,548 and pays...Ch. 2 - Growing perpetuities A common stock will pay a...Ch. 2 - Prob. 8PSCh. 2 - Present values What is the PV of 100 received in:...Ch. 2 - Continuous compounding The continuously compounded...Ch. 2 - Compounding intervals You are quoted an interest...Ch. 2 - Future values and annuities a. The cost of a new...Ch. 2 - Prob. 13PSCh. 2 - Present values A factory costs 800,000. You reckon...Ch. 2 - Present values A machine costs 380,000 and is...Ch. 2 - Opportunity cost of capital Explain why we refer...Ch. 2 - Present values A factory costs 400,000. It will...Ch. 2 - Present values and opportunity cost of capital...Ch. 2 - Prob. 19PSCh. 2 - Prob. 20PSCh. 2 - Annuities David and Helen Zhang are saving to buy...Ch. 2 - Annuities Kangaroo Autos is offering free credit...Ch. 2 - Present values Recalculate the NPV of the office...Ch. 2 - Prob. 24PSCh. 2 - Prob. 25PSCh. 2 - Continuous compounding How much will you have at...Ch. 2 - Perpetuities You have just read an advertisement...Ch. 2 - Compounding intervals Which would you prefer? a....Ch. 2 - Compounding intervals A leasing contract calls for...Ch. 2 - Annuities Several years ago, The Wall Street...Ch. 2 - Prob. 31PSCh. 2 - Prob. 32PSCh. 2 - Prob. 33PSCh. 2 - Prob. 34PSCh. 2 - Prob. 35PSCh. 2 - Amortizing loans Suppose that you take out a...Ch. 2 - Prob. 37PSCh. 2 - Annuities Use Excel to construct your own set of...Ch. 2 - Declining perpetuities and annuities You own an...
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- Calculate the present value assuming an annual discount rate of 12.00%? Years: CFs: O $436.99 O $541.87 O $450.10 O $371.44 $493.80 0 1 2 3 $0 $75 $225 $0 $300arrow_forwardWhat is the present discounted value of $400 to be received one year from now plus $500 to be received two years from now if the interest rate is 4%? А. $751.84 $860.05 C. $899.04 D. $912.89 B.arrow_forward(Present value) What is the present value of the following future amounts? a. $900 to be received 10 years from now discounted back to the present at 11 percent. b. $300 to be received 6 years from now discounted back to the present at 8 percent. c. $1,150 to be received 11 years from now discounted back to the present at 5 percent. d. $1,100 to be received 4 years from now discounted back to the present at 19 percent. a. What is the present value of $900 to be received 10 years from now discounted back to the present at 11 percent? $nothing (Round to the nearest cent.)arrow_forward
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- a. If the present value of $153 is $139, what is the discount factor? (Round your answer to 4 decimal places.) Discount Factor 0.9084 b. If that $153 is received in year 5, what is the interest rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Interest rate %arrow_forwardOver one year, future value or cash flow (CF), present value (PV), and the rate of interest (i) are related as follows Select one: a. PV = CF (1 + i). b. CF = PV/(1+i). c. CF + PV = 1/(1+i). d. CF/PV = (1+i).arrow_forwardRichard contributed $1,100 at the end of every 3 months, for 3 years, into a Registered Retirement Savings Plan (RRSP) earning 2.50% compounded quarterly. a. What is the future value of the fund at the end of 3 years? Round to the nearest centarrow_forward
- What is the total present value of $150 received in one year, $200 received in two years, and $800 received in six years if the discount rate is 8%? A. 482.72 B. 661.68arrow_forward(b) What is the present value of $30,700 to be received at the end of each of 5 periods, discounted at 10%? (Round answer to 2 decimal places, e.g. 25.25.)arrow_forwardAccounting How do I find the year 2-5 Present value of 1 at 9%?arrow_forward
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