Author Question: You estimate that the little drive-through coffee kiosk you own will generate ordinary annuity ... (Read 63 times)

tatyanajohnson

  • Hero Member
  • *****
  • Posts: 569
You estimate that the little drive-through coffee kiosk you own will generate ordinary annuity after-tax cash flows of 150,000 per year for the next ten years.
 
  If you discount these cash flows at an annual rate of 14, what is the present value of your expected cash flows?
  A) 782,417.35
  B) 891,955.78
  C) 1,500,000.00
  D) 2,900,594.27

Question 2

________ risk ________ be eliminated through greater diversification and is due to firm-specific or industry-wide factors such as strikes or resource price changes.
 
  A) Systematic; can
  B) Systematic; cannot
  C) Unsystematic; can
  D) Unsystematic; cannot
  E) None of the above



peilian

  • Sr. Member
  • ****
  • Posts: 316
Answer to Question 1

Answer: A
Explanation: A)
PV = PMT  = 150,000  = 782,417.35.
MODE = END
INPUT 10 14 ? -150,000 0
KEY N I/Y PV PMT FV
CPT 782,417.35

Answer to Question 2

C



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

Asthma cases in Americans are about 75% higher today than they were in 1980.

Did you know?

There are actually 60 minerals, 16 vitamins, 12 essential amino acids, and three essential fatty acids that your body needs every day.

Did you know?

More than 50% of American adults have oral herpes, which is commonly known as "cold sores" or "fever blisters." The herpes virus can be active on the skin surface without showing any signs or causing any symptoms.

Did you know?

Oxytocin is recommended only for pregnancies that have a medical reason for inducing labor (such as eclampsia) and is not recommended for elective procedures or for making the birthing process more convenient.

Did you know?

The first oncogene was discovered in 1970 and was termed SRC (pronounced "SARK").

For a complete list of videos, visit our video library