3.What would be the value of an asset that returns a cash flow of $100 in each of the next five years starting one year from now plus an additional $1000 at the end of the fifth year? 4.What would be the value of an asset that returns a cash flow of $100 in each of the next five years starting one year from now and $200 per year in years six through ten?
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For problems 1 – 5, use a discount rate of 10%.
3.What would be the value of an asset that returns a cash flow of $100 in each of the next five years starting one year from now plus an additional $1000 at the end of the fifth year?
4.What would be the value of an asset that returns a cash flow of $100 in each of the next five years starting one year from now and $200 per year in years six through ten?
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- Consider the following alternatives: i. $100 received in one year ii. $220 received in 5 years iii. $330 received in 10 years a. Rank the alternatives from most valuable to least valuable if the interest rate is 7% per year. b. What is your ranking if the interest rate is only 6% per year? c. What is your ranking if the interest rate is 19% per year? a. Rank the alternatives from most valuable to least valuable if the interest rate is 7% per year. First, calculate the present value (PV) of each alternative: The PV of $100 received in one year if the interest rate is 7% per year is $ (Round to the nearest cent.)3. What is the present value of the following cash flows at an interest rate of 10% per year? a. $100 received five years from now. b. $100 received 60 years from now. C. $100 received each year beginning one year from now and ending 10 years from ow. d. $100 received each year for 10 years beginning now. e. $100 each year beginning one year from now and continuing forever. (Hint: You do not need to use the financial keys of your calculator for this, just some common sense.)Consider the following alternatives: i. $100 received in one year ii. $230 received in 5 years iii. $320 received in 10 years a. Rank the alternatives from most valuable to least valuable if the interest rate is 10% per year. b. What is your ranking if the interest rate is only 4% per year? c. What is your ranking if the interest rate is 20% per year? ... a. Rank the alternatives from most valuable to least valuable if the interest rate is 10% per year. (Select the best choice below.) A. The ranking of the projects is: option i > option iii > option ii. B. The ranking of the projects is: option iii > option ii > option i. C. The ranking of the projects is: option ii > option i> option iii D. The ranking of the projects is: option ii > option iii > option i. b. What is your ranking if the interest rate is only 4% per year? (Select the best choice below.) A. The ranking of the projects is: option i > option ii > option ii. B. The ranking of the projects is: option iii > option ii >…
- You are offered the choice of 4 cash flow streams. Assume an 8% discount rate for each. Which cash flow stream is least valuable to you today? A. $1000 per year to be received at the end of each of the next 10 years. B. $10,000 to be received at the end of 15 years. C. $10,000 to be received at the end of 10 years. D. $250 per quarter to be received at the end of each quarter for the next 10 years.What is the present value of the following cash flows if the discount rate is at 5%? You receive 100 today, 200 in each of next 3 years (Year 1,2,3) and 150 in each of the next following 2 years (Year 4,5)? Enter your answer in absolute number with 2 decimal places.1. Consider the following cash flow payments: An income of $2000 at the end of year 2, an income of $5000 at the end of year 4, an expense of $3000 at the end of year 8, and a final income of $4000 at the end of year 10. • Draw the cash flow diagram for the cash flow payments. • Write an expression: what is the present equivalent value of these payments over the 10-year period assuming an interest rate of 10% per year.. Just write down the expression like "e.g. P = 1,000 (P/F, 4%, 10) + 2,500 (P/A, 4%, 5) -4,000". You don't need to calculate the final numerical answer. (Hint: you can write out the present equivalent value for each cash flow, and then sum them up.)
- What is the present value of end-of-year cash flows of 1000 per year, with the first cash flow received three years from today and the last one 10 years from today? Use a discount rate of 12 percent.Suppose an income stream will produce income at a rate of 4000 + 1000t dollars per year for 5 years, and is invested into an account that earns interest at an annual rate of 6% compounded continuously. (a) How much total income does the income stream produce? (b) How much money will be in the account after 5 years? (c) What is the present value of the income stream?1. If you receive $176 each month for 12 months and the discount rate is 0.04, what is the future value? (show the process and can use financial calculator)
- Suppose $100 is invested at the end of each year for the next 5 years into an account paying an interest rate r% p.a. How much can be drawn at the end of the 5 years?Approach(i) The first $100 is contributed in one year’s time and has to wait 4 years to “mature”. Write an equation describing this.(ii) The second $100 is contributed in two year’s time and has to wait 3 years to “mature”. Write an equation describing this.Consider the followingalternatives: i. $120 received in one year ii. $220 received in five years iii. $350 received in 10 years a. Rank the alternatives from most valuable to least valuable if the interest rate is 7% per year. b. What is your ranking if the interest rate isonly 2% per year? c. What is your ranking if the interest rate is 14% per year?Suppose $100 is invested at the end of each year for the next 5 years into an account paying an interest rate r% p.a. How much can be drawn at the end of the 5 years? Approach (i) The first $100 is contributed in one year's time and has to wait 4 years to "mature". Write an equation describing this. (ii) The second $100 is contributed in two year's time and has to wait 3 years to "mature". Write an equation describing this. (iii) The third $100 is contributed in three year's time and has to wait 2 years to "mature". Write an equation describing this. (iv) Continue with this logic and sum all the matured values expressed