4) The table below shows the interest rates available from investing in risk-free U.S. Treasury securities with different terms to maturity. Put another way, the table below presents the current spot yield curve. What is the present value (PV) of an investment that promises to pay $4,000 at the end of each year for the next four years with the first cash flow being paid one year from today? (provide your answer in the space below) 2 Term in years: Rate: 1 1.8% 2.25% The Present Value of the annuity described above is: 3 4 2.30% 2.66% 5 3.13%

4) The table below shows the interest rates available from investing in risk-free U.S. Treasury securities with different terms to maturity. Put another way, the table below presents the current spot yield curve. What is the present value (PV) of an investment that promises to pay $4,000 at the end of each year for the next four years with the first cash flow being paid one year from today? (provide your answer in the space below) 2 Term in years: Rate: 1 1.8% 2.25% The Present Value of the annuity described above is: 3 4 2.30% 2.66% 5 3.13%

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter12: The Cost Of Capital

Section: Chapter Questions

Problem 10QTD

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