How much would you be willing to pay today for an investment that would return P1,250 each year for the next 10 years, assuming a discount rate of 12 percent? A. P4,062.75 B. P5,062.75 C. P6,062.75 D. P7,062.75 E. None of the above
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How much would you be willing to pay today for an investment that would return P1,250 each year for the next 10 years, assuming a discount rate of 12 percent?
A. P4,062.75
B. P5,062.75
C. P6,062.75
D. P7,062.75
E. None of the above
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Solved in 3 steps
- What would you be ready to spend now for a P1,250 annual return over the following ten years, assuming a discount rate of 12%?A. P4,062.75B. P5,062.75C. P6,062.75D. P7,062.75E. None of the above.Assume that you will receive $2500 at the end of 6 years and want to know the present value (PV) of that future sum. Assuming a positive interest rate (required rate of return), which of the following is a possible number for the present value of the $2500? Even without knowing the interest rate, it is possible to answer this question. O A. $2742.53 B. $2632.45 O C. $1967.25 OD. $2572.50 O E. None of the above is a possible number.11. How much is a dollar worth today if you can expect to receive it a year from now from an Insurance bank with no risk of default?a. $1.00b. Not enough information given to tellc. Less than $1.00d. More than $1.0012. How much would you be willing to pay for an investment with an expected cash flow of $500 per year for the next 10 years if the assumed discount rate was 12 percent?Select one:a. $2635.14b. $2825.11c. $2710.45d. $2582.11 13. How much would you be willing to pay for an investment with an expected cash flow of RM500 per year for the next 10 years if the assumed discount rate was 12 percent?.a. RM2710.45b. RM2825.11c. RM8,774.36d. RM2635.14 14. If AA price is $40 per share and its current cash dividend of$3.85 per share is growing at a 7 percent rate per year, determine its required return?Select one:a. 16.2 %b. 17.3 %c. 16.6 %d. 15.1 % 15. Market that offers stock for the first time is known as _________.a. secondary marketb. derivative marketc. primary marketd. stock…
- What is the present value of RM4,500 to be received 10 years from today if the discount rate is 6 percent? Select one: a. RM2,126.590 b. RM2,327.689 c. RM2,165.790 d. RM2,512.776Q.11: You are considering a one-year investment. If you put up $1,250, you will get back $1,350. What rate is this investment paying?27. If the discount rate is 7%, what is the present value, to the nearest dollar, of an investment that will pay you and you heirs $11,000 per year forever? A) $ 38,881 B. $ 86,200 C. $103,050 D. $157,143 E. $587,955 1111
- 5.7 An investment will pay $150 at the end of each of the next 3 years, $200 at the end of Year 4, $350 at the end of Year 5, and $550 at the end of Year 6. If other investments of equal risk earn 5% annually, what is its present value? Its future value? Do not round intermediate calculations. Round your answers to the nearest cent. Present value: $ Future value: $which of the following investments that pay will $5000 in 12 years have a higher price today? A. The security that earns an interest rate it 8.25% B. The security that earns an interest rate of 5.50%?If $43,000 is invested now, which of the following value is closest to the equivalent future dollars 6 years from now to earn a real interest rate of 3% per year when the inflation rate is 6% per year? Select one: а. 51,344 b. 72,833 c. 66,709 d. 79,519 е. 60,996
- 5. a. b. C. d. e. Your investment advisor wants you to purchase an annuity that will pay you RM 25,000 per year for 10 years. If you require a 7% return, what is the most you should pay for this investment? (FVIF: 1.9672, FVIFA: 13.8164, PVIF: 0.5083, PVIFA: 7.0236) RM 241,787 RM 175, 590 RM 122,913 RM 225,682 RM 345,4108. Present value of annuities and annuity payments The present value of an annuity is the sum of the discounted value of all future cash flows. You have the opportunity to invest in several annuities. Which of the following 10-year annuities has the greatest present value (PV)? Assume that all annuities earn the same positive interest rate. An annuity that pays $1,000 at the end of each year An annuity that pays $1,000 at the beginning of each year An annuity that pays $500 at the end of every six months An annuity that pays $500 at the beginning of every six months You bought an annuity selling at $14,112.74 today that promises to make equal payments at the beginning of each year for the next twelve years (N). If the annuity's appropriate interest rate (1) remains at 11.00% during this time, then the value of the annual annuity payment (PMT) is You just won the lottery. Congratulations! The jackpot is $35,000,000, paid in twelve equal annual payments. The first payment on the lottery…You are offered an investment that will pay you GH¢ 200 in one year, GH¢ 400 the next year, GH¢ 600 the next year and GH¢ 800 at the end of the next year. You can earn 12 percent on very similar investments. What is the most you should pay for this one? A. Ghc 508.41 B. GHC 1,432.93 C. Ghc 2,000 D. Ghc 1,300
