What is the present value of a series of $5,000 end-of-the-year cash flows to be received forever if the required rate of return is 6.00% per year and the first cash flow is one year from today?
A) $8,333.33
B) $83,333.33
C) $300.00
D) This question cannot be answered because there is no time period provided.
B
Explanation: B) PV = PMT/r = %4,000/.06 = $83,333.33
You might also like to view...
Most established companies focus on ________ innovation when they aim to enter new markets by tweaking existing products, or they want to stay one step ahead in the market by using variations on a core product
A) incremental B) continuous C) spontaneous D) radical E) competitive
A corporate bond that yields 12 percent includes a risk-free rate of 7 percent and a default risk premium of 3 percent. The bond's maturity risk premium is _____.
A. 1 percent B. 10 percent C. 4 percent D. 2 percent E. 6 percent
Linda is the owner of Los Angeles-based leather manufacturing company. Almost 500 employees were working in that unit. Employees were not paid proper wages and overtime pay for extra time worked beyond their normal working hours. Who is authorized to file suit on behalf of employees seeking to collect wages and overtime??
A) ?The National Labor Relations Board B) ?The Employment Security Commission C) ?The Administrative Law Judge D) ?The Secretary of Labor
Revocation of a Will. William Laneer urged his son, also William, to join the family business. The son, who was made partner, became suspicious of the handling of the busi-ness's finances. He filed a suit against the business and reported it to the
Internal Revenue Service. Laneer then executed a will that disinherited his son, giving him one dollar and leaving the balance of the estate equally to Laneer's four daughters, including Bellinda Barrera. Until his death more than twenty years later, Laneer harbored ill feelings toward his son. After Laneer's death, his original copy of the will could not be found. A photocopy was found in his safe-deposit box, however, and his lawyer's original copy was entered for probate in an Arkansas state court. Barrera, who wanted her brother William to share an equal portion of the inheritance, filed a petition to contest the will. Barrera claimed, among other things, that Laneer had revoked the will, and that was why his original copy of the will could not be found. Was the will revoked? If so, to whom would the estate be distributed?