cash flows from these three investments are as follows:InvestmentB$ 2.000$1,0003.0001,0004.0001.000(5,000)1,000165.0003.000(Click on the con in order to copy its contents into a spreadsheetWhat is the present value of each of these three investments if the appropriate discount rate is 15 percent?End of Year23JEED$ 6,0006.000(6.000)(6.000)16.000a. What is the present value of investment A at an annual discount rate of 15 percent?(Round to the nearest cent

TIME VALUE OF MONEY Time Value of Money Means the Value of Money received today is more then the…

Answered: cash flows from these three investments…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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All computations must be done and shown manually Question 2 You are contemplating investing some surplus funds and the following options are available: Invest $50,000 @ 4% p.a. compounded annually for 5 years. Invest $45,000 @ 3% p.a. compounded quarterly for 5 years. Invest $40,000 @ 4.5% p.a. compounded semi-annually for 5 years. Invest $50,000 @ 3% p.a. compounded semi-annually for 5 years. Invest $55,000 @ 0.5% p.a. compounded weekly for 5 years Which one of the above is the second-best option?
The Hudson Corporation makes an Investment of $28,050 that provides the following cash flow. Year 1 2 3 Cash Flow $ 15,808 15-808 3,000 Use Appendix F and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. a. What is the net present value at a discount rate of 4 percent? Note: Do not round Intermediate calculations and round your answer to 2 decimal places. Nel present value b. What is the internal rate of return? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. internal rate of return
1. An investor has an opportunity to purchase any of the investments shown in the following table. Which purchase recommendations would you make, assuming that the investor can earn 10% on his investments? stream of cash number of years flows per year A 1 000 10 B 1 200 8. 900 11
Question 7: For the cash flows below, find the value of x that makes the equivalent annual worth in years 1 through 7 equal to $300 per year. Use an interest rate of 10% per year. Year 0 1 2 3 Answer: $619.88 Cash Flow,$ 200 200 200 200 Year 4 5 6 7 Cash Flow, $ X 200 200 200
Hatim has invested in a fund that will provide him a cash flow of OMR 11700 for the next 20 years. If the discount rate is 8.5 percent, what is the present value of this cash flow stream Select one: O a. 147108.55 OMR O b. None of these O c. 124680.54 OMR O d. 110721.03 OMR O e. 127107.50 OMR
Qla) Determine the amount to be deposited in a fund now that earns 9% per year to provide for eight end of year withdrawals of RM187.45 each? Include the cash flow diagram in your calculation.
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- Suppose that the cash flows of two investments are as follows: Unit: $1000 CASH FLOW AT YEAR 1 YEAR: 2 Investment A (11,500,000) 5,650,000 5,250,000 3,700,000 2,500,000 2,200,000 Investment B (11,500,000) 2,950,000 4,250,000 5,000,000 5,100,000 4,900,000 Using the investment decision rules (i.e., NPV & IRR) to select the best investment. Suppose that the hurdle rate, r is16%.
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1.4 The table represents the cash flows received from the investments at the end year. Each investment requires an initial investment of $1000. Answer the questions related to the two investment opportunities in the table below. Year 1 2 3 4 5 Investment A 225 215 250 225 205 Investment B 220 225 250 250 210 There are two approaches to evaluate this investment. Show the necessary calculations. • Assume the interest rate ot 4.33%. Use present value analysis to determine which investment you should choose? Calculating the rate of returns of the investment, which investment would you choose and why?

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