Question

(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 present value of investment A at an annual
discount rate of 15 percent? |

b. What is the present value of investment B at an annual
discount rate of 15 percent? |

c. What is the present value of investment C at an annual
discount rate of 15 percent? |

Answer #1

if you have any query, mention it in comments..

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 $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:
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...

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...

w6 11/12 (Related to Checkpoint 6.5) (Present value of a
growing perpetuity) What is the present value of a perpetual
stream of cash flows that pays $2 comma 500 at the end of year one
and the annual cash flows grow at a rate of 4% per year
indefinitely, if the appropriate discount rate is 13%? What if the
appropriate discount rate is 11%?

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.

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...

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?

(Related to Checkpoint 6.2) (Present value of annuity
payments) The state lottery's million-dollar payout provides
for
$1.5 million to be paid in
20
installments of
$75,000
per payment. The first
$75,000
payment is made immediately, and the
19
remaining
$75,000
payments occur at the end of each of the next
19
years. If
8
percent is the discount rate, what is the present value of this
stream of cash flows? If
16
percent is the discount rate, what is the...

(Related to Checkpoint 11.1) (Net present value
calculation) Dowling Sportswear is considering building a new
factory to produce aluminum baseball bats. This project would
require an initial cash outlay of $5,500,000 and would generate
annual net cash inflows of $1,100,000 per year for 7 years.
Calculate the project's NPV using a discount rate of 5
percent.
If the discount rate is 5 percent, then the project's NPV is
$_______. (Round to the nearest dollar.)

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 2 minutes ago

asked 13 minutes ago

asked 14 minutes ago

asked 17 minutes ago

asked 50 minutes ago

asked 54 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago