What will be the total present value of an income flow starting with 1500TL/year in year 3 and ending in year 12 appreciating at a rate of 0.16, together with a lump sum income of 50 000TL to occur in year 15 if i:0.25? Oa. less than 2000 TL O b. between 2001-4000 TL O C. between 4001-6000 TL O d. between 6001-9000 TL O e. greater than 9001 TL

What will be the total present value of an income flow starting with 1500TL/year in year 3 and ending in year 12 appreciating at a rate of 0.16, together with a lump sum income of 50 000TL to occur in year 15 if i:0.25? Oa. less than 2000 TL O b. between 2001-4000 TL O C. between 4001-6000 TL O d. between 6001-9000 TL O e. greater than 9001 TL

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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Calculate the EAR of the following investment, entered as a percentage (Example: if your answer is 0.145, enter 14.5) Year Number Cashflow 0 -11400 1 3500 2 3000 3 3100 4 2800 Your Answer:
For the following cash flow, calculate the equivalent AW. Assume i= 8% per year. Year Incomes Outcomes 4600 1 4600 2 6000 4600 7000 4600 4 8000 4600 9000 10000 Answer: 3.
(b) Suppose that the allocation of a natural resource during three years results in a stream of total surplus value of $100 per period t (i.e.: t = 0; 1; 2). Obtain the present value of this stream when the discount rate is r = 0:10 and also when it is r = 0:05. Annuity amount (A) = $100 Time Period (n) = 3 years Discount rate (r) = 10% or 0.10 & 5% or 0.05 Present value of this stream when the discount rate is 10%: PVA = PV = A (P/A, r, n) PV = 100 (P/A, 0.10, 3) PV = 248.69 Present value of this stream when the discount rate is 5%: PVA = PV = A (P/A, r, n) PV = 100 (P/A, 0.5, 3) PV = 272.3 (c) Alternatively, the resource could be fully extracted now (say, in the period t = 0), resulting in a total surplus $280 at t = 0 and 0 in every future period. Is this immediate extraction strategy preferred to the extraction strategy described in (a) when r = 0:10? What about when r = 0:05? What does this tell us about the intuitive meaning of discounting regarding intertemporal…
a) An investment has the following cash flows: Time (years) Investment (outflow) Return (inflow) 0 RM1,000 1 RM250 2 RM250 3 RM250 4 RM250 5 RM250 10 RMX i) In order for the investment to return at an effective rate of interest of 9.5% per annum, what is ii) Suppose now that , and is paid at time , what is the effective annual rate of interest earned on this investment, to the nearest one decimal place? b) Aida Kamilia won RM1,000,000 in a contest, to be paid in twenty RM50,000 payments at yearly intervals. The first payment paid at the time of the contest. (Of course, the present value of her winnings is less than RM1,000,000). Aida Kamilia decided to keep each year to spend and deposit the remaining into account earning an annual effective rate of 5%. She chose the value of to be as large as possible so that at the moment of the 20th deposit, the account would have grown to such a size that it would provide Aida Kamilia at least per year in…
If you invest $8,800, what is your rate of return if you will receive the following cash flows at the end of these years: Yr. 1 $2,000; Yr. 2 $2,100; Yr. 3 $2,200; Yr. 4 $2,300; Yr. 5 $3,700?
For the following cash flow, if the interest rate i=10%, the present value is closest to: Year 1 2 3 4 Value 1500 1400 1300 1200 Оа. 3,003.55 Ob. 4,316.99 с. 3,879.17 С. Od. 3,441.36
For the given cash flow, if the equivalent uniform annual payments is $5000 and the interest rate is 25% per year. End of 1 3 4 6. 7. Year Cost 2A 2A+30 2A+60 2A+90 2A+120 2A+150 2A+180 2A+210 2A+240 Determine the amount of (A) ? Determine the equivalent present value?
Calculate the Payback Period using the following Information All figures are in OMR Initial Investment = 10000 Cash Flow after Tax(CFAT) are as follows : Year 1 : 5000 Year 2 : 3000 Year 3 : 2000 Year 4 : 3000 Year 5 : 50000 2.5 Years 3 Years 3 Years and 10 months 3 Years and 2 months
Calculate the Payback Period using the following Information All figures are in OMR Initial Investment = 25000 Cash Flow after Tax(CFAT) are as follows : Year 1 : 5000 Year 2 : 5000 Year 3 : 5000 Year 4 : 4000 Year 5 : 6000 4 Years and 6 months 5 Years 5 Years 2 Years
Evaluate the net present value of following streams of income: a. $1000 per year at an interest rate of 5% in perpetuity. b. $1000 per year at an interest rate of 5% in perpetuity. c. $1 million per year at an interest rate of 5% in perpetuity. |d. $1 million per year in perpetuity, but not beginning until year t=5 at an interest rate of 15%.
Approximately. what is the value of the total Present worth (where Ptotal= PA + PG) if G (arithmetic gradient) =40, n=9 years, A340 and i 8% per year? Select one: Oa 2487 Ob.4015 Oc 2996 Od 3596
Assume that at the beginning of the year, you purchase an investment for $2,500 that pays $67 annual income. Also assume that the investment's value has decreased to $2,350 at the end of the year. a. What is the rate of return for this investment? b. Is the rate of return a positive or a negative number? Complete this question by entering your answers in the tabs below. Req 1 Req 2 What is the rate of return for this investment? Note: Enter your answer as a percent rounded to 2 decimal places. Input the amount as a positive value. Rate of return % Req 1 Req 2 >

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