Help!!

posted by .

A train company has signed a contract to deliver a new fuel driven train 3 years from now. The price they will receive at the end of 3 years is $20 million. If the firm's cost of capital is 6%, what is the present value of this payment?

A train company has signed a contract to deliver a new fuel driven train 3 years from now. The price they will receive at the end of 3 years is $20 million. If the firm's cost of capital is 6%, what is the present value of this payment?

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Economics

    Jim signed a new deal for $10 million with the Toronto maple leafs. THe terms of the contract were 1 million immediately and 800,000 per year for the next 5 years (first payment after 1 year) and $1 million per year for the next 5 …
  2. Finance

    Innovation Company is thinking about marketing a new software product. Upfront cost to market and develop the product are $5 million. The product is expected to generate profits of $1 million per year for 10 years. The company will …
  3. finance

    1. A bond has a $1,000 par value (face value) and a contract or coupon interior rate of 8%. A new issue would have a flotation cost of 5% of the market value. The bonds mature in 10 years. The firm’s average tax rate is 28% and its …
  4. Finance

    A company has identified the following investments as looking promising. Each requires an initial investment of $1.2 million. Which is the best investment?
  5. fin 370

    (individual or component costs of capital)Compute the cost of the capital for the firm for the following:?
  6. fin 370 # 2

    (individual or component costs of capital) Your firm is considering a new investment proposal and would like to calculate its weighted average cost of capital. To help in this, compute the cost of capital for the firm for the following: …
  7. fin 370 # 2

    (individual or component costs of capital) Your firm is considering a new investment proposal and would like to calculate its weighted average cost of capital. To help in this, compute the cost of capital for the firm for the following: …
  8. FIN 370

    1. (defining capital structure weights) templeton extended care facilities, inc. is considering the acquisition of a chain of cemeteries for $340 million. Since the primary asset of this business is real estate, templeton’s management …
  9. Finance

    The company bought some land three years ago for $3.8 million in anticipation of using it as a toxic dump site for waste chemicals, but it built a piping system to safely discard the chemicals instead. The land was appraised last week …
  10. finance

    Innovation Company is thinking about marketing a new software product. Upfront cost to market and develop the product are $5 million. The product is expected to generate profits of $1 million per year for 10 years. The company will …

More Similar Questions