Question: If a business has two four year future values option of 38400 and 38900 . what discount rate would make the two options have an

If a business has two four year future values option of 38400 and 38900 . what discount rate would make the two options have an equivalent NPV?

The future value is 38400 for option 1 and 38900 for option 2

Time period is 4 years

what discount rate would make the two options have an equivalent NPV?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Q:

If a business has two four year future values option of 38400 and 38900 . what discount rate would make the two options have an equivalent NPV

Q:

If a business has two four year future values option of 38400 and 38900 . what discount rate would make the two options have an equivalent NPV? The future value is 38400 for option 1 and 38900 for...

Q:

Newport Mining has a lease, with two years remaining, in which it can extract copper ore on a remote Island in Indonesia. The company has completed the exploration phase and estimates that the mine...

Q:

EQUIPMENT 1. Microsoft Excel 2. OptiPlex TM GX280 Mini Tower Datasheet 3. 1704FPVt Screen Datasheet 4. Precision M20 Datasheet Problem Statement: A Case Study on Energy Efficiency With effect from 1...

Q:

1) ABC Pharmaceuticals, a large pharmaceutical company headquartered in the Midwest wants to build a new ethanol facility in Nebraska in order to support future increases in demand. The management...

Q:

I need to answer these but I am having a ton of difficulties with the first 10 questions that are calculation oriented. Assignment I FINA 395 The assignment is due in the class on November 11. Please...

Q:

im struggling with question 2. the solution says PV of cash outflows - PV of cash inflows but i dont know how to solve for PV of cash inflows and get the correct NPV Problems for Investment Rules...

Q:

3.Assume that you need to withdraw $1,000 from your savings account every month for the next 5 years. The savings account earns 12% per year, compounded monthly. How much must you deposit today? A....

Q:

I need help answering these questions for my FIN 530 class. In mid-2010 a pound of apples cost $1.32, while oranges cost $1.16. Ten years earlier the price of apples was only $.95 a pound and that of...

Q:

Carey Ltd, Value of real option? Question C3 Carey Ltd has launched a bid for Zhou Ltd and you have been appointed by Carey Ltd to advise on the bid. You have collected the following background...

Q:

Steve and Cathy are preparing their income tax returns. Johnny is two years old and their only child and they have hired Steve's sister Samantha (22 years old) to look after Johnny. They pay her $125...

Q:

Critique the structure chart shown, which depicts a guest making a hotel reservation. Describe the chart in terms of fan-in, fan-out, coupling, and cohesion. Redraw the chart to improve thedesign....

Q:

Firm XYZ s debt - to - equity ratio is 3 2 % . Based on this information, has financed more of its assets with: Answer bonds debt equity I don't know yet

Q:

Add "Viggo Mortenslet cast = new Map ( ) ;en " to the cast as the key, with value "Aragorn".