Problem 2-13, Lofting Snodbury NPV
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
Given a list of cash flows, determine the NPV of the boring machine.
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Given a list of cash flows, determine the NPV of the boring machine.
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Determine the net present value of a factory that will produce inflows for 10 years. Given the opportunity cost of capital, determine the NPV of the project and what it is worth after a certain number of years.
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Determine the NPV of a suburban office block.
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Determine the NPV of the bulk carrier given revenues, operating costs, refit costs, and a scrap value.
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Given a perpetuity, find the NPV of the investment.
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Given an advertisement stating that you pay them for a certain number of years, and then they’ll pay you into perpetuity, determine the rate of interest if it is a fair deal.
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Given a cash dividend that is expected to increase indefinitely, determine the PV of the dividend stream.
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Given the interest rate, determine the PV of an asset, the approximate PV of an asset that pays a perpetuity in some future year, and finally, determine the value of a piece of land.
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Given discount factors, compute the interest rate, and vice versa. Finally, determine the discount factor given that you’ve solved for the annuity factor.
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Determine which company is offering you a better deal on a new car. The first company makes you pay monthly, while the second company gives you a discount off the list price.
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