Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Part 1
​(Related to Checkpoint​ 6.6)  
​(Present
value of annuities and complex cash
flows​)
You are given three investment alternatives to analyze. The cash flows from these three investments are as​ follows:
 
Investment Alternatives
End of Year
A
 
B
 
C
 
1
​$
14,000
 
 
​$
14,000
2
  
14,000
 
 
 
 
3
  
14,000
 
 
 
 
4
  
14,000
 
 
 
 
5
  
14,000
​$
14,000
  
 
6
 
 
  
14,000
 
70,000
7
 
 
 
14,000
 
 
8
 
 
 
14,000
 
 
9
 
 
 
14,000
 
 
10
 
 
 
14,000
 
14,000
​(Click
on the icon
  
in order to copy its contents into a
spreadsheet.​)
 
Assuming an annual discount rate of
15
​percent, find the present value of each investment.
 
 
 

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Part 1
a.  What is the present value of investment A at an annual discount rate of
15
​percent?
 
​$enter your response here  
​(Round to the nearest​ cent.)
Part 2
b.  What is the present value of investment B at an annual discount rate of
15
​percent?
 
​$enter your response here  
​(Round to the nearest​ cent.)
Part 3
c.  What is the present value of investment C at an annual discount rate of
15
​percent?
 
​$enter your response here  
​(Round to the nearest​ cent.)
 
 
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