Question content area top Part 1 (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 End of Year A B C 1 $ 16,000 $ 21,000 2 16,000 3 16,000 4 16,000 5 16,000 $ 16,000 6 16,000 63,000 7 16,000 8 16,000 9 16,000 10 16,000 21,000 (Click on the icon in order to copy its contents into a spreadsheet.) Assuming an annual discount rate of 19 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 19 percent? $enter your response here (Round to the nearest cent.) Part 2 b. What is the present value of investment B at an annual discount rate of 19 percent? $enter your response here (Round to the nearest cent.) Part 3 c. What is the present value of investment C at an annual discount rate of 19 percent? $enter your response here (Round to the nearest cent.)
Question content area top Part 1 (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 End of Year A B C 1 $ 16,000 $ 21,000 2 16,000 3 16,000 4 16,000 5 16,000 $ 16,000 6 16,000 63,000 7 16,000 8 16,000 9 16,000 10 16,000 21,000 (Click on the icon in order to copy its contents into a spreadsheet.) Assuming an annual discount rate of 19 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 19 percent? $enter your response here (Round to the nearest cent.) Part 2 b. What is the present value of investment B at an annual discount rate of 19 percent? $enter your response here (Round to the nearest cent.) Part 3 c. What is the present value of investment C at an annual discount rate of 19 percent? $enter your response here (Round to the nearest cent.)
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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Question
Question content area top
Part 1
(Present
value of flows)
You are given three investment alternatives to analyze. The cash flows from these three investments are as follows:|
Investment
|
||||||
|
End of Year
|
A
|
|
B
|
|
C
|
|
|---|---|---|---|---|---|---|
|
1
|
$
|
16,000
|
|
|
$
|
21,000
|
|
2
|
|
16,000
|
|
|
|
|
|
3
|
|
16,000
|
|
|
|
|
|
4
|
|
16,000
|
|
|
|
|
|
5
|
|
16,000
|
$
|
16,000
|
|
|
|
6
|
|
|
|
16,000
|
|
63,000
|
|
7
|
|
|
|
16,000
|
|
|
|
8
|
|
|
|
16,000
|
|
|
|
9
|
|
|
|
16,000
|
|
|
|
10
|
|
|
|
16,000
|
|
21,000
|
(Click
on the icon
spreadsheet.)
Assuming an annual discount rate of
19
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
19
percent?$enter your response here
(Round to the nearest cent.)Part 2
b. What is the present value of investment B at an annual discount rate of
19
percent?$enter your response here
(Round to the nearest cent.)Part 3
c. What is the present value of investment C at an annual discount rate of
19
percent?$enter your response here
(Round to the nearest cent.)Expert Solution
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