Let's say you are going to buy a car from your uncle and become an Uber driver when you graduate. It is a high end Lincoln Navigator for which he paid $70,000 5 years ago. You will take delivery two years from now. He needs a payment of $1,000 today plus $5,000 one year from now. Upon delivery two years from now, you pay him a final payment of $26,722.50. Based on the fundamentals of this class, what is the value of your initial investment? Assume a discount rate of 5%. Use the $ symbol and round to the nearest dollar.
Let's say you are going to buy a car from your uncle and become an Uber driver when you graduate. It is a high end Lincoln Navigator for which he paid $70,000 5 years ago. You will take delivery two years from now. He needs a payment of $1,000 today plus $5,000 one year from now. Upon delivery two years from now, you pay him a final payment of $26,722.50. Based on the fundamentals of this class, what is the value of your initial investment? Assume a discount rate of 5%. Use the $ symbol and round to the nearest dollar.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Let's say you are going to buy a car from your uncle and become an Uber driver when you graduate. It is a high end Lincoln Navigator for which he paid $70,000 5 years ago. You will take delivery two years from now. He needs a payment of $1,000 today plus $5,000 one year from now. Upon delivery two years from now, you pay him a final payment of $26,722.50. Based on the fundamentals of this class, what is the value of your initial investment? Assume a discount rate of 5%. Use the $ symbol and round to the nearest dollar.
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