(Present value of a complex stream) Don Draper has signed a contract that will pay him $60,000 at the end of each year for the next 6 years, plus an additional $120,000 at the end of year 6. If 9 percent is the appropriate discount rate, what is the present value of this contract? The present value of the contract is $ (Round to the nearest cent.) C...
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- (Present value of a complex stream) Don Draper has signed a contract, that will pay him $70,000 at the end of each year for the next 5 years, plus an additional $120,000 at the end of year 5. If 12 percent is the appropriate discount rate, what is the present value of this contract? The present value of the contract is $ (Round to the nearest cent.)contract would you prefer? 4. What are the present values of the following cash flows? A. $1,000 to be received in 8 years if the discount rate is 5 percent. B. $35 a year for 7 years compounded annually at 7 percent. C. a $100 perpetuity discounted at 9 percent.(Present value of a complex stream) Don Draper has signed a contract that will pay him $70,000 at the end of each year for the next 5 years, plus an additional $110,000 at the end of year 5. If 9 percent is the appropriate discount rate, what is the present value of this contract? a. What is the present value of $70,000 at the end of each year for the next 5 years if the discount rate is 9 percent? (Round to the nearest cent.)
- (Present value of a complex stream) Don Draper has signed a contract that will pay him $40,000 at the end of each year for the next 8 years, plus an additional $120,000 at the end of year 8. If 8 percent is the appropriate discount rate, what is the present value of this contract? a. What is the present value of $40,000 at the end of each year for the next 8 years if the discount rate is 8 percent? $nothing (Round to the nearest cent.)Don Draper has signed a contract that will pay him $50,000 at the end of each year for the next 8 years, plus an additional $150,000 at the end of year 8. If 7 percent is the appropriate discount rate, what is the present value of this contract? Question content area bottom Part 1 The present value of the contract is $ enter your response here . (Round to the nearest cent.)1. A contract calls for a lump-sum payment of $15,000. Find the present value of the contract assuming. When making these calculations, you need to use a present value factor that is carried to three decimal places to get the correct answers. a. The payment is due in five years, and the current interest rate is 9 percent. Your answer should contain a dollar sign.b. The payment is due in ten years and the current interest rate is 5 percent. Your answer should contain a dollar sign.c. Between the two calculations, A and B, which option is the best option for the person receiving the payment? State in a full sentence why you chose this option.
- Find the present value of a contract that requires yearly payments of 11,832 for 20 years. Money is worth 3.37% for the first eight years and 8.02% for the last 12 years. Solve and explain...Peter Lynchpin wants to sell you an investment contract that pays equal $12,600 amounts at the end of each of the next 18 years. If you require an effective annual return of 7 percent on this investment, how much will you pay for the contract today? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Value todayA contract will pay you $5000 per year every other year for the next 30 years. That is, since today is time 0, the contract will pay you $5000 in year 2, 4, 6. 28, 30. The discount rate is 8% compounded semiannually. What is the present value of this contract?
- #1) Time value: Annuities Marian Kirk wishes to select the better of two 10-year annuities,C and D. Annuity C is an ordinary annuity of $2,500 per year for 10 years. AnnuityD is an annuity due of $2,200 per year for 10 years.a. Find the future value of both annuities at the end of year 10 assuming that Mariancan earn (1) 10% annual interest and (2) 20% annual interest.c. Find the present value of both annuities, assuming that Marian can earn (1) 10%annual interest and (2) 20% annual interest. #2) Retirement planning Hal Thomas, a 25-year-old college graduate, wishes to retire atage 65. To supplement other sources of retirement income, he can deposit $2,000each year into a tax-deferred individual retirement arrangement (IRA). The IRA willearn a 10% return over the next 40 years.a. If Hal makes annual end-of-year $2,000 deposits into the IRA, how much will hehave accumulated by the end of his sixty-fifth year?b. If Hal decides to wait until age 35 to begin making annual end-of-year…Suppose you take a 3/1 interest - only, 30-year ARM for $140,000.00 with an interest - only contract rate of 5% and a following rate of 7% in year 4. Assume you pay 1 discount points. Suppose that the contract rate in year 5 is 7.25% and this contract rate stays constant from years 5 through 30. What is the APR?H5. A person has a property that they want to sell, and they need to know the present value of the following options: (for both options consider a rate of 21.6%) a. Advance payments of $25,000 every six months for 5 years b. Payments of $9,000 quarterly for 4 years and a final payment of $20,000 nine months after the last deposit