(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 A B C 1 $ 18,000 $ 18,000 2 18,000 3 18,000 4 18,000 5 18,000 $ 18,000 6 18,000 90,000 7 18,000 8 18,000 9 18,000 10 18,000 18,000 (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. Question content area bottom Part 1 a. What is the present value of investment A at an annual discount rate of 23 percent? $ enter your response here (Round to the nearest cent.)
(Present value of
|
Investment Alternatives |
|
|
|
|
|
|
|
End of Year |
A |
|
B |
|
C |
|
|
1 |
$ |
18,000 |
|
|
$ |
18,000 |
|
2 |
|
18,000 |
|
|
|
|
|
3 |
|
18,000 |
|
|
|
|
|
4 |
|
18,000 |
|
|
|
|
|
5 |
|
18,000 |
$ |
18,000 |
|
|
|
6 |
|
|
|
18,000 |
|
90,000 |
|
7 |
|
|
|
18,000 |
|
|
|
8 |
|
|
|
18,000 |
|
|
|
9 |
|
|
|
18,000 |
|
|
|
10 |
|
|
|
18,000 |
|
18,000 |
(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.
Question content area bottom
Part 1
a. What is the present value of investment A at an annual discount rate of
23 percent?
$
enter your response here
(Round to the nearest cent.)
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
