If we have a painting we know we can sell in five years time for $85,000 how much is it worth today? Assume we wish a rate of return of 6%.

If we have an oil well which will give us the following cash flows: $ 10,000 in 2018 (next year), $20,000 in 2020 and $ 40,000 in 2021, how much could we value this today if our rate of return is 15%?

Bloxham Industries are estimated to have a zero growth dividend of $4.50 indefinitely. If your required rate of return on Bloxham is 12%.

What would be fair value for this stock?

Answer rating: 100% (QA)

To calculate the present value of future cash flows and determine the worth of an asset today we can use the concept of discounted cash flows By disco... View the full answer