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.
Given a list of cash flows, determine the NPV of the boring machine.
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.
Determine the NPV of a suburban office block.
Determine the NPV of the bulk carrier given revenues, operating costs, refit costs, and a scrap value.
Given a perpetuity, find the NPV of the investment.
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.
Given a cash dividend that is expected to increase indefinitely, determine the PV of the dividend stream.
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.
Given discount factors, compute the interest rate, and vice versa. Finally, determine the discount factor given that you’ve solved for the annuity factor.
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.