A 100 dollar cash payment in 20 years and a discount rate of 5 percent gives you a specific present value. Consider instead a cash flow for 10 years and a discount rate of 10 percent. What would the payment need to be for the present values of the two cash flows to be the same? A)100 B)97.76 C)96.80 D)103.21
A 100 dollar cash payment in 20 years and a discount rate of 5 percent gives you a specific present value. Consider instead a cash flow for 10 years and a discount rate of 10 percent. What would the payment need to be for the present values of the two cash flows to be the same? A)100 B)97.76 C)96.80 D)103.21
Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
7th Edition
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Chapter4: Managing Your Cash And Savings
Section: Chapter Questions
Problem 7FPE: Calculating interest earned and future value of savings account. If you put 6,000 in a savings...
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A 100 dollar cash payment in 20 years and a discount rate of 5 percent gives you a specific present value. Consider instead a cash flow for 10 years and a discount rate of 10 percent. What would the payment need to be for the present values of the two cash flows to be the same?
A)100
B)97.76
C)96.80
D)103.21
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