If a project generates cash flow, which can be positive or negative, as shown in the table
Question:
If a project generates cash flow, which can be positive or negative, as shown in the table below (RMB Yuan), is the project financially feasible if the market interest rate is 8%? For example, you need to invest 1000 Yuan now and will receive 500 Yuan at the end of the first year.
7. If you want to withdraw ¥5000 from a bank account every year in the next 20 years, and the bank account provides interest rate of 5%, how much money do you need to deposit now?
8. Now is the beginning of the year, a stock will pay a dividend of 5 Yuan at the end of this year. Because the stock is a growth stock, experts predict that the dividend will grow at a rate of 3% per year. If the required return (risk-free rate plus risk premium) on investment of the stock is 10%, what is the current theoretical price of the stock?
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill