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Suppose you have an asset that pays a single cash flow of $[…

Suppose you have an asset that pays a single cash flow of $[CF] in [T] years.  Assuming a continuous compound annual interest rate of [Rc]%, what is its present value?

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You invest $[PV] at a [APR]% APR compounded semiannually. Ho…

You invest $[PV] at a [APR]% APR compounded semiannually. How much money will you have after [T] years?

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A project produces a cash flow of $[CF1] in year one, $[CF2]…

A project produces a cash flow of $[CF1] in year one, $[CF2] in year two, and $[CF3] in year three. If the discount rate is [IY]%, what is the project’s present value?

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What is the future value of $[PV] if we invest this amount f…

What is the future value of $[PV] if we invest this amount for [T] years at an interest rate of [IY]%?

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Suppose you go to a local bank to borrow $[PV] and repay it…

Suppose you go to a local bank to borrow $[PV] and repay it in [T] years. The bank will charge you an effective annual rate of [IY]%. What is the annual payment needed to repay the loan?

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Suppose you are a rich philanthropist and you aim to provide…

Suppose you are a rich philanthropist and you aim to provide $[CF] a year in perpetuity, starting [T] years from now. Assuming that the discount rate is [IY]%, what is the present value of the perpetuity?

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Suppose you buy a three-year zero-coupon bond with $100,000…

Suppose you buy a three-year zero-coupon bond with $100,000 face value for $[PV]. What is the effective annual YTM for this bond?

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You have been offered an opportunity to purchase a growing p…

You have been offered an opportunity to purchase a growing perpetuity. The first payment of $[CF] will occur two years from now, and the payments will start growing at a rate of [g]% per year indefinitely starting in year 2. If the discount rate is [IY]%, what is the present value of this perpetuity?

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A machine costs $[I] and is expected to produce the followin…

A machine costs $[I] and is expected to produce the following cash flows:  Year 1: [CF1] Year 2: [CF2] Year 3: [CF3] Year 4: [CF4] If the discount rate is [IY]%, what is the machines’ NPV?

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Suppose another asset pays $[CF1] at the end of the first ye…

Suppose another asset pays $[CF1] at the end of the first year and $[CF2] at the end of the fifth year. Assuming a discount rate of [IY]%, what is the price of this asset (i.e., the PV)?

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