Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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For the cash flows below determine the amount in
year 1, if the annual worth in years 1 through 9 is
$3500 and the interest rate is 10% per year
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- The appropriate discount rate for the following cash flows is 15 percent compounded quarterly. Year 1 2 3 4 Cash Flow $700 600 What is the present value of the cash flows? о 1,100 Multiple Choice O $1,628.22 $251.20 O $1,694.67arrow_forwardWhat is the future value of four cash flows of $500 to be received at the end of each of 4 years with interest compounded annually at 6% (rounded to nearest dollar)? $2,030 $2,171 $2,187 $2,819arrow_forwardThe rate of earnings is 12% and the cash to be received in 2 years is $29,617. Determine the present value amount, using the following partial table of present value of $1 at compound interest. (round to two decimal points). Year 6% 10% 12% 1 0.943 0.909 0.893 2 0.890 0.826 0.797 3 0.840 0.751 0.712 4 0.792 0.683 0.636 a.$26,447.98 b.$23,604.75 c.$24,463.64 d.$21,087.30arrow_forward
- If the rate of earnings is 12% and the cash to be received in two years is $20,000, determine the present value amount, using the following partial table of present value of $1 at compound interest. Year 6% 10% 12% 1 0.943 0.909 0.893 2 0.890 0.826 0.797 3 0.840 0.751 0.712 4 0.792 0.683 0.636arrow_forwardAt the start of this year, $10,000 was deposited into an account that earns an effective annual interest rate of 4% per year for 10 years. Another $1,000 will be deposited at the end of each year for years 1-10, also earning 4% per year. All interest earned remains in the account. How much money is in this account at the end of year 10?arrow_forwardFor a present sum of $620,000, determine the annual worth (in then-current dollars) in years 1 through 7 if the market interest rate is 12% per year and the inflation rate is 5% per year.The annual worth is $?arrow_forward
- For the cash flow revenues shown below, find the value of G that makes the equivalent annual worth in years 1 through 7 equal to $500. The interest rate is 6.00% per year. (Round the final answer to three decimal places.) Cash flow, $ Year 0 1 2 3 The value of G is $ 225.0 225.0+ G 225.0+2G Year 4 5 16 Cash flow, $ 225.0+36 225.0+4G 225.0+5G 225.0+66arrow_forwardA company expects to receive the following cash flows $2,000 for the first ten years and then $3,000 for the next ten years. The discount rate is 10.0%. What is the present value of this 20-year cash flow? 7.arrow_forwardThe annually compounded interest rate is 16.1834%. What is the PV of a continuous stream of cash flows, amounting to $2,100 per year, starting immediately and continuing for 19 years? A. $918,787 B. $10,000 C. $2,100 D. $13,190.18arrow_forward
- A financial instrument provides three future cash flows: 1. $1,406.01 at the end of 2 years 2. $2,596.43 at the end of 8 years 3. $1,172.62 at the end of 13 years Calculate the duration (D) of the financial instrument at a yield of 7% pa compounded yearly. Give your answer in years to 2 decimal places. D yearsarrow_forwardA set of cash flows begins at $25,000 the first year, decreasing 10% each year until n = 10 years. If the interest rate is 4%, what is the present value?arrow_forwardWhat is the present worth of cash flows that begin at $30,000 and decrease at 10% per year for 5 years? The interest rate is 15%.arrow_forward
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