Investment X offers to pay you $7,500 per year for 9 years, whereas Investment Y offers to pay you $10, 200 per year for 5 years. a. If the discount rate is 6 percent, what is the present value of these cash flows? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. b. If the discount rate is 22 percent, what is the present value of these cash flows? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. a. Present value of Investment X at 6 percent Present value of Investment Y at 6 percent b. Present value of Investment X at 22 percent Present value of Investment Y at 22 percent

Investment X offers to pay you $7,500 per year for 9 years, whereas Investment Y offers to pay you $10, 200 per year for 5 years. a. If the discount rate is 6 percent, what is the present value of these cash flows? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. b. If the discount rate is 22 percent, what is the present value of these cash flows? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. a. Present value of Investment X at 6 percent Present value of Investment Y at 6 percent b. Present value of Investment X at 22 percent Present value of Investment Y at 22 percent

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Investment X offers to pay you $4,700 per year for 9 years, whereas Investment Y offers to pay you $6,400 per year for 5 years. a. If the discount rate is 8 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. If the discount rate is 20 percent, what is the present value of these cash flows?
Investment X offers to pay you $4,800 per year for 9 years, whereas Investment Y offers to pay you $7,100 per year for 5 years. If the discount rate is 6 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Investment X Investment Y If the discount rate is 16 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Investment X Investment Y
Investment X offers to pay you $6,100 per year for 9 years, whereas Investment Y offers to pay you $8,400 per year for 5 years. If the discount rate is 7 percent, what is the present value of these cash flows? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. If the discount rate is 23 percent, what is the present value of these cash flows? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.
Investment X offers to pay you $5,400 per year for 9 years, whereas Investment Y offers to pay you $7,500 per year for 5 years. If the discount rate is 6 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) If the discount rate is 21 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
Assume the appropriate discount rate for the following cash flows is 10.2 percent. Year Cash Flow 1 $2,100 2 2,000 3 1,700 4 1,500 What is the present value of the cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Assume the appropriate discount rate for the following cash flows is 10.3 percent. Year Cash Flow 1 $2,150 2,050 234 1,750 1,550 What is the present value of the cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value
Investment X offers to pay you $3,423 per year for 11 years, whereas Investment Y offers to pay you $6,380 per year for 5 years. What is the dollar difference (higher minus lower) in the present values of these two cash flow streams if the discount rate is 7.28 percent? Answer to two decimals.
Investment X offers to pay you $5,900 per year for 9 years, whereas Investment Y offers to pay you $8,700 per year for 5 years. If the discount rate is 4 percent, what is the present value of these cash flows? If the discount rate is 14 percent, what is the present value of these cash flows?
Consider the following cash flows: Year Cash Flow 0 -$ 28,900 1 14,800 2 3 14,100 10,500 a. What is the profitability index for the cash flows if the relevant discount rate is 8 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161 b. What is the profitability index if the discount rate is 13 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161 c. What is the profitability index if the discount rate is 20 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161 Answer is not complete. 0.181 × a. Profitability index b. Profitability index c. Profitability index
You are given the following cash flows. What is the present value (t = 0) if the discount rate is 12 percent? 0 1 2 3 4 5 6 (Periods) 0 2,000 2,000 2,000 0 -2,000 -2,000 (cash flows) Select one: a. $4,289 b. $2,804 c. $2,656 d. $4,804 e. $5,302
Consider the following cash flows: Year Cash Flow 0 −$28,300 1 15,400 2 13,500 3 9,900 a. What is the profitability index for the cash flows if the relevant discount rate is 9 percent? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) b. What is the profitability index if the discount rate is 14 percent? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) c. What is the profitability index if the discount rate is 25 percent? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.)
Consider the following cash flows: Year Cash Flow 0 -$ 29,500 1 14,200 2 3 14,700 11,100 a. What is the profitability index for the cash flows if the relevant discount rate is 10 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161. b. What is the profitability index if the discount rate is 15 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161. c. What is the profitability index if the discount rate is 22 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161. a. Profitability index b. Profitability index c. Profitability index

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