Finance Answers

Explain the nature of derivative markets, Derivative instruments that trade in this market and how derivative contracts are created.  

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?