The nihilist Ivan is setting up a recording studio which will have an annual revenue of $70,000 and annual cost of $40,000. The studio will require an initial investment of $10,000. What is the net present value after two years of recording? Ivan's discount rate is 10%, and income tax in Riga, where he lives, is 40%. In the investment year, depreciation on all items is 20%, then 50% the following year, and 30% in the next year, which is the end of the schedule. A. $57,700 B. $24,800 C. $34,400 D. $42.100

The nihilist Ivan is setting up a recording studio which will have an annual revenue of $70,000 and annual cost of $40,000. The studio will require an initial investment of $10,000. What is the net present value after two years of recording? Ivan's discount rate is 10%, and income tax in Riga, where he lives, is 40%. In the investment year, depreciation on all items is 20%, then 50% the following year, and 30% in the next year, which is the end of the schedule. A. $57,700 B. $24,800 C. $34,400 D. $42.100

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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The nihilist Jokubas is setting up a recording studio which will have an annual revenue of $80,000 and annual cost of $30,000. The studio will require an initial investment of $10,000. What is the net present value after two years of recording? Jokubas's discount rate is 10%, and income tax in Riga, where he lives, is 20%. In the investment year, depreciation on all items is 20%, then 50% the following year, and 30% in the next year, which is the end of the schedule. A. $76,800 B. $101,400 C. $61,200 D. $62,100
The nihilist Nikita is setting up a recording studio which will have an annual revenue of $80,000 and annual cost of $40,000. The studio will require an initial investment of $20,000. What is the net present value after two years of recording? Nikita's discount rate is 10%, and income tax in Riga, where he lives, is 40%. In the investment year, depreciation on all items is 50%, then 30% the following year, and 20% in the next year, which is the end of the schedule. A. $49,400 B. $71,500 C. $29,200 D. $41,000
Jason is setting up a recording studio which will have an annual revenue of $70,000 and annual cost of $40,000. The studio will require an initial investment of $10,000. What is the net present value after two years of recording? Jason's discount rate is 10%, and income tax in Seattle, where he lives, is 40%. In the investment year, depreciation on all items is 20%, then 50% the following year, and 30% in the next year, which is the end of the schedule. A. $24,800 B. $34,400 C. $42,100 D. $57,700
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Sams pays a delivery firm to distribute products. Delivery revenues are 30000 per year. he can buy a truck for 12500 that will be adequate for the next 3 years. operating and maintenance costs are 20000 per year. at the end of 3 years the salvage of the truck is 2500. the Marr is 20% per year. what is the annual worth of the investment
Bill plans to open a service center. The equipment will cost $50,000. Bill expects the after-tax cash inflows to be $15,000 annually for 8 years, after which he plans to scrap the equipment and retire. Assume the required return is 10.00%. What is the project's Pl?
You want to go to an archaeological dig in search of the lost ark. You must save a portion of your monthly take-home salary of $2,000 for an undetermined amount of time. The cost of the expedition is $12,000 in cash and $1,000 at the end of each month for ten months. The investment rate of return is 12% annually compounded monthly. At a 50% of take-home salary savings rate how long will it take to save enough to go on the dig?
Alexander will take a trip using $5500 of his investment funds that return 8% per year. To pay for the trip, he will also get a loan of $10000 at 6.5% per year interest over 6 years to cover the estimated costs. What is the WACC?
You are considering purchasing a dump truck. The truck will cost $45,000 and have operating and maintenance costs that start at $15,000 in the first year and increase by $2,000 per year thereafter. Assume that the salvage value at the end of five years is $9,000 and the interest rate is 12%. Determine the equivalent annual cost of owning and operating the truck.
Lungu wants to buy a Car that costs K25,000. He has saved K6000, which he will use as deposit, and he will finance the rest of it by taking out a loan to be paid back in equal installments, mortised over 6years at an annual interest rate of 12%. What will his payment be? You have estimated that your vehicle will need to be replaced 10 years from now at a cost of K120, 000. If the interest rate is fixed at 10%, how much do you need to set aside every three months to provide for that money 10 years from now? You plan to invest K10, 000 on the first day of every year for the next 6 years. If the interest rate on the investment is 8%, how much would the investment be worth at the end of the 6th year? Telemundo Ltd. borrows K100, 000 from AB bank. The loan is to be repaid in 1year with periodic payments made at the end of each month. The lender charges 20% interest per annum. Calculate the monthly charge and construct the amortization schedule for the first FIVE (5) repayments on this loan.
Bill plans to open a self-serve grooming center in a storefront. The grooming equipment will cost $265,000, to be paid immediately. Bill expects after-tax cash inflows of $59,000 annually for seven years, after which he plans to scrap the equipment and retire to the beaches of Nevis. The first cash inflow occurs at the end of the first year. Assume the required return is 13 percent. What is the project’s PI? Should it be accepted?
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