Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Question
ou are given three investment alternatives to analyze. The cash flows from these three investments are as follows:
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Investment
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|||||||
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End of Year
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A
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B
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C
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|||||
|---|---|---|---|---|---|---|---|---|
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1
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$
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2,000
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$
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2,000
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$
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6,000
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|
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2
|
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3,000
|
|
|
2,000
|
|
6,000
|
|
|
3
|
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4,000
|
|
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2,000
|
|
(6,000)
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|
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4
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(5,000)
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|
|
2,000
|
|
(6,000)
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|
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5
|
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5,000
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|
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6,000
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16,000
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a. What is the
b. What is the present value of investment B at an annual discount rate of 13 percent?
c. What is the present value of investment C at an annual discount rate of 13 percent?
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