Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Macroeconomics Expert

Problem 1:

Your brother has an idea for new website which would comprise only of paid links that would provide you money when someone clicks on links on your page (Google ad- words). To draw people to the website you will need to use money on paid search. You expect that you will need to spend $1000 subsequently year and the amount of spending will rise at 7% per year. You think you will get $300 of revenue on upcoming year and your revenue will grow at 11% per year. If the appropriate discount rate is 12%, what is the value of your brother’s website project?

Problem 2:

You’re considering investing in the start-up company which will not generate any dividends for 10 years. In ten years you will collect your first dividend check of $500. The dividends continue to arrive per year in perpetuity but will rise at a 5% annual rate. If the discount rate is 10% what is the value of your investment in start-up?

Problem 3:

Frankie Avalon would like for you to spend in a Churro cart. He tells you that the Cart will cost $7000. Throughout the first year of operation the cart will manufacture $800 of positive cash flow. Throughout the second year it will manufacture $1000 of cash flow. In the third year it will create $1150 of positive cash flow. After the third year the cash inflows will continue yearly and grow at a 5% annual rate. Frankie recognizes that you’re wary of Churro cart investments and pleads with you to consider that fact that cash flows are generated during the year. Hence he suggests that you value the cart assuming that the cash flows arrive in middle of the year. Find out the NPV of cart assuming cash flows come in the middle of year. How different is the NPV assuming middle of year vs. end of the year arrival? Suppose a discount rate of 11%.

Macroeconomics, Economics

  • Category:- Macroeconomics
  • Reference No.:- M914092

Have any Question? 


Related Questions in Macroeconomics

Provide an example of a method to hedge with energy futures

Provide an example of a method to hedge with energy futures. Explain why this is fiscally prudent. Use one reference when answering.

Assume that the government of the state of new jersey has

Assume that the government of the state of New Jersey has determined that a large number of injuries and deaths have occurred as a result of accidents involving the installation and repairs of electrical equipment at pri ...

Economics assignment paragarphswrite 3 paragraphs answering

Economics Assignment Paragarphs Write 3 paragraphs answering the following questions: 1. How does each of the following relate to the financial crisis of 2007-2008: declines in real estate values, sub-prime mortgage loan ...

Discuss structural cyclical frictional and natural

Discuss structural, cyclical, frictional, and natural unemployment. What fiscal and monetary policies are appropriate to fight unemployment? What type of unemployment will be affected most by these policies? Why? Which w ...

This question concerns labor mobility between countries a

This question concerns labor mobility between countries A and B. a. Say that country A's MPL = -L + 10 and country B's MPL = 2L + 1. What would be the optimal amount of L? Note: country B's MPL is written in terms of the ...

A describe 2 positive feedback systems and 2 negative

a.) Describe 2 positive feedback systems and 2 negative feedback systems for global climate change. b.) If all of the ice in the Arctic Ocean were to melt, how high would global sea-level rise? If all the ice in Greenlan ...

The economy is operating below full employment y0 gt y the

The economy is operating below full employment (Y0 > y* )The government wants bring the economy back to full employment but in the process wants to change the composition of demand toward investment and away from consump ...

Topic international tradequestionpromptnbspin 2014 the

Topic: International Trade Question/Prompt:   "In 2014, "the United States exported $2.34 trillion worth of goods and services-an all-time record. Exports from the United States in 2014 equaled the entire gross domestic ...

The following labor demand and supply curves for cashiers

The following labor demand and supply curves for cashiers in retail stores. Labor demand curve: E =13 - 1/20 W Labor supply curve:   E =-1 + 1/20 W a) Show in a table the number of cashier demanded and supply for each wa ...

Economic analysis of public policy problem set1 an op-ed

Economic Analysis of Public Policy Problem Set 1. An Op-Ed article by Martin Schmidt published in the New York Times on October 19th 2006 argued in favor of a tax on drive-through food orders as a method for reducing obe ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro