A firm is evaluating an investment proposal which has an initial investment of $8,000 and discounted cash flows valued at $6,000 The net present value of the investment is?
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A firm is evaluating an investment proposal which has an initial investment of $8,000 and discounted cash flows valued at $6,000 The
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- You run a display ad campaign for a product that your firm markets. The campaign generates 28 million impressions, with a click rate of 0.038% and a conversion rate of 1.74%. The margin of each unit of product sold is $383, and consumers typically buy only one unit of the product at a time. The website sells impressions at a cost of $2 per thousand impressions (CPM). What is the return on investment for your firm? Group of answer choices 14.8% 26.6% 79.0% 127% 149.2%Suppose you buy a share of stock for $10 and sell it for $20; your profit is thus $10. If that happens within a year, your rate of return is an impressive 100% ($10/$10 = 1). If it takes five years, what would be the rate of return on your investment? (See Figure.)A stock you are evaluating is expected to experience supernormal growth in dividends of 12 percent over the next three years. Following this period, dividends are expected to grow at a constant rate of 4 percent. The stock paid a dividend of $1.50 last year and the required rate of return on the stock is 11 percent. Calculate the stock's fair present value. (Do not round intermediate calculations.) Please show all the steps, including the equation(s).
- If sales is $100,000 and the change in stock is 40% of sales Calculate value of outputCalculate the value of a stock that is expected to pay a constant dividend of $1.05per year if the required return is 11%.John will invest $100, 000 in buying the rights to a water well. In perpetuity, the water well makes $20,000 in revenue each year, but it carries an annual cost of $5,000 on maintenance. Also, John must pay the rights of the water well this year, but the revenue and maintenance costs start next year. If the discount rate is 10%, what is the net present value of the investment?
- A preferred stock pays an annual dividend of $1.25. What is one share of this stock worth today if the rate of return is 13.5 percent? Show your workBuena Vision Clinic is considering an investment that requires an outlay of $600,000 and promises a net cash inflow one year from now of $810,000. Assume the cost of capital is 10 percent. Required: 1. Break the $810,000 future cash inflow into three components: a. The return of the original investment b. The cost of capital c. The profit earned on the investment 2. Now, compute the present value of the profit earned on the investment. 3. Compute the NPV of the investment. Compare this with the present value of the profit computed in Requirement 2. What does this tell you about the meaning of NPV?The Rosebud Motel is a must-stay for any road-tripper or weary traveler. The motel fils each of its 24 rooms for 200 nights each during the year. Annual fixed costs total $160,000. The variable cost of one night's stay is $100. The motel owners expect a 50% return on the company's $500,000 of assets each year. The Rosebud Motel is currently the only place to stay for 50 miles. What should Rosebud's cost-plus price be if sales volume and costs are expected to stay consistent? OA. $133.33 OB. $185.42 OC. $2,150.00 OD. $152.08 OE. The Rosebud Motel would not set its price as it is a price-taker in this market.
- 34. Skyscrapers Corporation is engaged in the manufacturing of standard wide flange section of steel whose selling price is P690. For the average monthly production of wide flange, the cost of production y is approximately related to the number of units produced x by the following equation. y = 0.5x? + 400x + 24,000. What is investment rate corresponding to a volume of production to earn the maximum rate of return of capitalYou are presented 2 investment options. Which one gives you a better return? In option A, you pay $3,000 today and receive $750 at the end of the year for the next 5 years. In option b, you pay $2,000 today and receive $3,000 at the end of five yearsConsider a training program that will result in a worker receiving a one time bonus of $2,900 two years from now. The cost of the training program is $2,000. What is the rate of return on this investment?