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A: Excel Spreadsheet: Excel Workings:
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A: Calculation of Present value (PV):
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A: Year Income 1 3500 2 3500 3 3500 4 4000 5 4000 Discount rate = 15%
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A: present value formula: present value =A×1-11+rnr where, r=discount rate n=number of years
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Determine the present value of a financial instrument that pays $18,500 in 10 years if instruments of similar risk pay 6% per year.
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- An investment will pay $150 at the end of each of the next 3 years, $300 at the end of Year 4, $600 at the end of Year 5, and incur a $500 cost at the end of Year 6. If other investments of equal risk earn 6.7% annually, what is this investment’s present value?An investment will pay $100 at the end of each of the next 3 years, $200 at the end of Year 4, $300 at the end of Year 5, and $500 at the end of Year 6. If other investments of equal risk earn 8% annually, what is this investment’s present value? Its future value?An investment will pay $150 at the end of each of the next 3 years, $300 at the end of Year 4, $600 at the end of Year 5, and incur a $500 cost at the end of Year 6. If other investments of equal risk earn 6.7% annually, what is this investment’s present value? Its future value?
- An investment will pay $100 at the end of each of the next 3 years, $200 at the end of year 4, $300 at the end of Year 5, and $500 at the end of Year 6. If other investments of equal risk earn 8 percent annually, what is its present value? Its future value?An investment offers $6,100 per year for 15 years, with the first payment occurring today. If the required return is 6 per cent, what is the value of the investment?What is the present value of a security that will pay $2,000 at the end of each year for 6 years if securities of equal risk pay 5% annually? What if the payments occur at the beginning of each period?
- Find the present value of an investment if it is expected to provide annual earnings of $20,000 for 10 years and to have a resale value of $50,000 at the end of that period. Assume a 8% rate and earnings at year end. The present value of 1 at 8% for 10 periods is .46319. The present value of an ordinary annuity at 8% for 10 periods is 6.71008. The future value of 1 at 8% for 10 periods is 2.15892.What is the present value of an investment that will pay $1,000 in one year's time, and $1,000 every year after that, when the interest rate is 8%?3. An investment offers P4,900 per year for 15 years, with the first payment occurring one year fromnow. If the required return is 8 percent, what is the value of theinvestment? What would the value be if the payments occurred for 20years?
- An investment offers $2,500 per year for 8 years, with the first payment occurring one year from now. If the required return is 12%, what is the value of the investment?An investment will pay $100 at the end of each of the next 3 years, $200 at the end of Year 4, $300 at the end of Year 5, and $500 at the end of Year 6. If other investments of equal risk earn 6% annually, what is its present value? Its future value? Do not round intermediate calculations. Round your answers to the nearest cent.An investment will pay you $99,000 in 15 years. If the appropriate discount rate is 6.7 percent compounded quarterly, what is the present value?