Finance Answers

An investment with a 3year life and a cost of #120000 generates revenue of #25000 in year1 #45000 in year2 and #65000 in year3. If the discount rate is 8%

(i) what is the NPV of the investment.

(ii) state whether the investment should be accepted or not and why.

(Using the 12% as your second discount rate to solve the remaining part of the question under IRR.

As investment with a 3year life and a cost of #120000 generates revenue of #25000 in year 1 #45000 in year 2 and #65000 in year 3. If the discount rate 8%

(i) what is the NPV of the investment.

(ii) state whether the investment should be accepted or not and why.

(iii) using 12% as your second discount rate, to solve the remaining part of the question under IRR.

As investment with a 3year life and a cost of #120000 generates revenue of #25000 in year 1 #45000 in year 2 and #65000 in year 3. If the discount rate is 8%

(i) what is the NPV of the investment.

(ii) state whether the investment should be accepted or not and why.

(iii) using 12% as your second discount rate, to solve the remaining part of the question under IRR.

As a prospective share holder, you are offered a project that will pay you an income of #8000 in 5years time at 13% rate of discount. What is the present value your future dividend?

) A project in Malaysia costs $10,000,000. Over the next 4 years, the project will generate 

operating cash flows of $2700,000, $2700,000, $3420,000 and $3780,000 measured in 

today’s dollars using a required rate of return of 15 percent. What is the break-even salvage 

value of this project?

1. Suppose 90-day investments in Europe have a 5% annualized return. In the United States, 90-day investments of similar risk have a 7% annualized return. In today’s 90-day forward market, €1 equals $1.32. If interest rate parity holds, what is the spot exchange rate ($/€)?

1. A McDonald’s Big Mac costs 2.44 yuan in China, but costs $4.20 in the United States. Assuming that purchasing-power parity (PPP) holds, how many Chinese yuan are required to purchase 1 U.S. dollar?