Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Transcribed Image Text:こS13つシ
Obama Ltd has made an investment that is expected to generate a cash flow of
$20,000 each year for the next five vears. If Obama uses a discount rate of 5% on this
investment, the present value of this investment for Obama is (to the nearest dollar):
PVF(I+レ)
Cito.osj5
ーム
$86,590
b.
$101,766
$101,154
00
C.
d.
$101,0
%3D
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- am. 144.arrow_forward113.arrow_forwardTom Thompson expects to invest $18,000 at 9% and, at the end of a certain period, receive $92,551. How many years will it be before Thompson receives the payment? (PV of $1. FV of $1. PVA of $1. and EVA of $1) (Use appropriate factor(s) from the tables provided. Round "Table Factor" to 4 decimal places.) Future Value $ 92,551 Present Value $ 18,000 = Table Factor Years yearsarrow_forward
- Blossom Telecommunications Corp. has made an investment in another company that will guarantee it a cash flow of $25,000 each year for the next five years. If the company uses a discount rate of 19 percent on its investments, what is the present value of this investment? (Round factor values to 4 decimal places, e.g. 1.2514 and final answer to 2 decimal places, e.g. 15.25.)arrow_forward8. A particular investment promises to make year-end annual payments in perpetuity. The first four annual payments will be $5. After that, future annual payments will grow at 5% per year forever. What is the present value of this investment if the discount rate is 10%? a. $98.68 b. $87.57 c. $76.46 d. $65.35 e. $54.24arrow_forwardHiren Add explanationarrow_forward
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