(Prese of payn nts) Yóu áré given invéšt- ипeven stre ment alternatives to analyze. The cash flows from these three investments are as follows: INVESTMENT END OF YEAR A B C 1 $10,000 $10,000 10,000 10.000

(Prese of payn nts) Yóu áré given invéšt- ипeven stre ment alternatives to analyze. The cash flows from these three investments are as follows: INVESTMENT END OF YEAR A B C 1 $10,000 $10,000 10,000 10.000

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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elated to Checkpoint 6.6) (Present value of annuities and complex cash flows) You are given three investment alternatives to analyze. The cash flows from these three investments are as follows: Investment Alternatives End of Year 1 2 3 4 5 6 7 8 9 A $12,000 12,000 12,000 12,000 12,000 $12,000 12,000 12,000 12,000 12.000 C $ 12,000 60,000 a. What is the present value of investment A at an annual discount rate of 22 percent? $36271.36 (Round to the nearest cent.) b. What is the present value of investment B at an annual discount rate of 22 percent? (Round to the nearest cent.) c. What is the present value of investment C at an annual discount rate of 22 percent? (Round to the nearest cent.)
(Present value of an uneven stream of payments) You are given three investment alternatives to analyze. The cash flows from these three investments are as follows: Investment End of Year A C $ 2,000 $1,000 $ 5,000 5,000 2 3,000 1,000 4,000 (5,000) 5,000 1,000 1,000 (5,000) (5,000) 15,000 3,000 (Click on the icon in order to copy its contents into a spreadsheet.) What is the present value of each of these three investments if the appropriate discount rate is 12 percent? a. What is the present value of investment A at an annual discount rate of 12 percent? $ 6,683.95 (Round to the nearest cent.) b. What is the present value of investment B at an annual discount rate of 12 percent? $ 4,739.63 (Round to the nearest cent.) c. What is the present value of investment C at an annual discount rate of 12 percent? (Round to the nearest cent.)
Save (Present value of an uneven stream of payments) You are given three investment alternatives to analyze. The cash flows from these three investments are as follows: Investment End of Year 1 A B C $ 2.000 $3,000 $ 4,000 2 3,000 3,000 4,000 3 4,000 3,000 (4,000) (5,000) 3,000 (4,000) 5 5,000 7,000 14,000 (Click on the icon in order to copy its contents into a spreadsheet.) What is the present value of each of these three investments if the appropriate discount rate is 9 percent? a. What is the present value of investment A at an annual discount rate of 9 percent? (Round to the nearest cent.)
(Present value of annuities and complex cash flows) You are given three investment alternatives to analyze. The cash flows from these three investments are as follows: Investment Alternatives End of Year 1 2 4677AWN 3 5 8 A $10,000 10,000 10,000 10,000 10,000 B $10,000 10,000 10,000 10,000 C $10,000 50,000 a. What is the present value of investment A at an annual discount rate of 21 percent? (Round to the nearest cent.) b. What is the present value of investment B at an annual discount rate of 21 percent? (Round to the nearest cent.) C. What is the present value of investment C at an annual discount rate of 21 percent? (Round to the nearest cent.)
(Related to Checkpoint 6.6) (Present value of annuities and complex cash flows) You are given three investment alternatives to analyze. The cash flows from these three investments are as follows: Investment Alternatives End of Year 1 2 3 4 5 6 $ 780 A $ 19,000 19,000 19,000 19,000 19,000 B $19,000 19,000 19,000 19,000 19.000 C $19,000 95,000 a. What is the present value of investment A at an annual discount rate of 23 percent? $ 53265.99 (Round to the nearest cent.) b. What is the present value of investment B at an annual discount rate of 23 percent? (Round to the nearest cent.) ..
Calculate the EAR of the following investment, entered as a percentage (Example: if your answer is 0.145, enter 14.5) Year Number Cashflow 0 -11400 1 3500 2 3000 3 3100 4 2800 Your Answer:
(Present value of an uneven stream of payments) You are given three investment alternatives to analyze. The cash flows from these three investments are as follows: End of Year 1 2 3 A $ 2,000 3,000 4 5 Investment B $1,000 1,000 4,000 1,000 (5,000) 1,000 5,000 5,000 (Click on the icon in order to copy its contents into a spreadsheet.) What is the present value of each of these three investments if the appropriate discount rate is 11 percent? с $ 4,000 4,000 (4,000) (4,000) 14,000 a. What is the present value of investment A at an annual discount rate of 11 percent? (Round to the nearest cent.)
Present value of annuities and complex cash flows) You are given three investment alternatives to analyze. The cash flows from these three investments are as follows: End of Year 1 2 3 45678 A $13,000 13,000 13,000 13,000 13,000 Investment B $13,000 13,000 13,000 13,000 C $ 18,000 54,000 a. What is the present value of investment A at an annual discount rate of 25 percent? (Round to the nearest cent.) b. What is the present value of investment B at an annual discount rate of 25 percent? (Round to the nearest cent.) c. What is the present value of investment C at an annual discount rate of 25 percent? (Round to the nearest cent.)
(Related to Checkpoint 6.6) (Present value of annuities and complex cash flows) You are given three investment alternatives to analyze. The cash flows from these three investments are as follows: End of Year 1 2 3 4 5 6 7 8 9 10 A $10,000 10,000 10,000 10,000 10,000 Investment Alternatives B $10,000 10,000 10,000 10,000 C $10,000 50,000 10,000 10,000 (Click on the icon in order to copy its contents into a spreadsheet.) Assuming an annual discount rate of 23 percent, find the present value of each investment. 10.000
(Present value of annuities and complex cash flows) You are given three investment alternatives to analyze. The cash flows from these three investments are as follows: End of Year 1 NO456TO 2 3 7 8 S A $13,000 13,000 13,000 13,000 13,000 Investment B S $13,000 13,000 13,000 13,000 (Round to the nearest cent.) C a. What is the present value of investment A at an annual discount rate of 25 percent? $37227.32 (Round to the nearest cent.) $18.000 b. What is the present value of investment B at an annual discount rate of 25 percent? 54.000 c. What is the present value of investment C at an annual discount rate of 25 percent? (Round to the nearest cent.)
Damien offers you a sequence of end-of-year cash flows for an investment as follows: Year 1 2 3 4 4 What is the value of the cash flows if the opportunity cost is 6 percent? (Round to the nearest dollar). Please click on the following link to access a blank worksheet Click to open:: O $8.392 $8.598 Cash Flow $4,000 $3,000 $2,000 $1,000 $8.734 $8.915
The following are the cash flows of two projects: Year 0 1 2 3 4 Project A $ (220) 100 100 100 100 Project B $ (220) 120 120 120 What are the internal rates of return on projects A and B? Note: Enter your answers as a percent rounded to 2 decimal places. Project A B IRR % %

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