Question

You are given three investment alternatives to analyze. The cash flows from these three investments are as follows:

End of Year |
A |
B |
C |

1 |
10,000 | 10,000 | |

2 |
10,000 | ||

3 |
10,000 | ||

4 |
10,000 | ||

5 |
10,000 | 10,000 | |

6 |
10,000 | 50,000 | |

7 |
10,000 | ||

8 |
10,000 | ||

9 |
10,000 | ||

10 |
10,000 | 10,000 |

Assuming an annual discount rate of 20 percent, find the present value of each investment.

Answer #1

Statement Computing Present values |
In $ |
||||||

Year |
Investment A |
Investment B |
Investment C |
Discounting factor @20% |
Discounted Values Investment A |
Discounted Values Investment B |
Discounted Values Investment C |

1 |
10000.00 |
0.00 |
10000.00 |
0.833 |
8333.33 |
0.00 |
8333.33 |

2 |
10000.00 |
0.00 |
0.00 |
0.694 |
6944.44 |
0.00 |
0.00 |

3 |
10000.00 |
0.00 |
0.00 |
0.579 |
5787.04 |
0.00 |
0.00 |

4 |
10000.00 |
0.00 |
0.00 |
0.482 |
4822.53 |
0.00 |
0.00 |

5 |
10000.00 |
10000.00 |
0.00 |
0.402 |
4018.78 |
4018.78 |
0.00 |

6 |
0.00 |
10000.00 |
50000.00 |
0.335 |
0.00 |
3348.98 |
16744.90 |

7 |
0.00 |
10000.00 |
0.00 |
0.279 |
0.00 |
2790.82 |
0.00 |

8 |
0.00 |
10000.00 |
0.00 |
0.233 |
0.00 |
2325.68 |
0.00 |

9 |
0.00 |
10000.00 |
0.00 |
0.194 |
0.00 |
1938.07 |
0.00 |

10 |
0.00 |
10000.00 |
10000.00 |
0.162 |
0.00 |
1615.06 |
1615.06 |

Present values |
29906.12 |
16037.38 |
26693.29 |

Present value of annuities and complex cash flows)
You are given three investment alternatives to analyze. The cash
flows from these three investments are as follows:
Assuming an annual discount rate of 20 % find the present value
of each investment.
Investment Alternatives
End of Year
A
B
C
1
$
10,000
$
10,000
2
10,000
3
10,000
4
10,000
5
10,000
$
10,000
6
10,000
50,000
7
10,000
8
10,000
9
10,000
10
10,000
10,000

You are given three investment alternatives to analyze. The cash
flows from these three investments are as follows:
End of Year
A
B
C
1
$3,000
$1,000
$4,000
2
4000
1000
4000
3
5000
1000
(4,000)
4
-6000
1000
(4,000)
5
6000
4000
14000
a. What is the present value of investment A at an annual
discount rate of 9 percent? $____(Round to the nearest
cent.)
b. What is the present value of investment B at an annual
discount rate...

You are given three investment alternatives to analyze. The cash
flows from these three investments are as follows:
End of Year A B C
1 $1,000 $1,000 $5,000
2 2,000 1,000 5,000
3 3,000 1,000 (5,000)
4 -4,000 1,000 (5,000)
5 4,000 3,000 15,000
What is the present value of each of these three investments if
the appropriate discount rate is 14 percent?
a. What is the present value of investment A at an annual
discount rate of 14percent?

You are given three investment alternatives to analyze. The cash
flows from these three investments are as follows:
Investment End of Year:
#1: A. $1,000 B. $3,000 C. $5,000
# 2: A. $2,000 B. $3,000 C. $5,000
#3: A. $3,000 B. $3,000 C. ( $5,000 )
#4. A. ( $4,000 ) B. $3,000 C. ( $5,000 )
#5. A. $4,000 B. $5,000 C. $15,000.
What is the present value of each of these three investments if
the appropriate discount rate...

(Related to Checkpoint 6.6)
(Present value of annuities and complex cash flows )
You are given three investment alternatives to analyze. The cash
flows from these three investments are as follows:
End of Year
A
B
C
1
$16,000
$16,000
2
16000
3
16000
4
16000
5
16000
$16,000
6
16000
80000
7
16000
8
16000
9
16000
10
16000
16000
Assuming an annual discount rate of 15 percent, find the
present value of each investment.
a. What is the...

Problem 5-50 (similar to) (Present value of an uneven stream of
payments) You are given three investment alternatives to analyze.
The cash flows from these three investments are shown in the Below
table . Assuming a discount rate of 25 percent, find the present
value of each investment.
a. What is the present value of investment A at 25 percent
annual discount rate?
INVESTMENT
END OF YEAR
A
B
C
1
$12,000
$12,000
2
12000
3
12000
4
12000
5...

Present value of an uneven stream of payments ) You are given
three investment alternatives to analyze. The cash flows from these
three investments are as follows: Investment End of Year
End of Year A B C
1 $3,000 $1,000 $5,000
2 4,000 1,000 5,000
3 5,000 1,000 (5,000)
4 -6,000 1,000 (5,000)
5 6,000 5,000 15,000
What is the present value of each of these three investments if
the appropriate discount rate is
14percent?

You are given an investment to analyze. The cash flows from this
investment are End of year 1. $3,280 2. $1,460 3. $4,220 4. $11,170
5. $6,940 What is the present value of this investment if 5 percent
per year is the appropriate discount rate?

you are given an investment to analyze. the cash flows from this
investment are:
end of year
1. $2,777
2. $3,130
3 $.697
4.$2,091
5. $966
what is the future value of this investment at the end of year
five if 19.57 percent of the year is the appropriat
interest(discount) rate?

Given the following alternatives and cash flows:
Alternative #1 has an investment of $25,000 and an annual income of
$6,000/year for eight years.
Alternative #2 has an investment of $35,000 and an annual income of
$12,500/year for four years
If MARR = 12% What is the the difference in present worth
AW2 - AW1 assuming repeatability?
-$1,631
$9
$1,631
-$1,839

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