Suppose you won a lottery 600000 interest of 0.05 percent, they offered you many choices the first one is to take the 600000 immediately • 2nd choice to take 110000 forever • 3rd choice to take 90000 for 7 years beginning now. • 4th choice is to accept 3200000 at the end of the 20 years • 5th choice if you put 600000 in a saving account how much you will have after 30 years interest is compound quarterly what is the value of the money from choice number 2? what is the value of the money from choice number 3? what is the value of the money from choice number 4? what is the value of the money from choice number 5?

Suppose you won a lottery 600000 interest of 0.05 percent, they offered you many choices the first one is to take the 600000 immediately • 2nd choice to take 110000 forever • 3rd choice to take 90000 for 7 years beginning now. • 4th choice is to accept 3200000 at the end of the 20 years • 5th choice if you put 600000 in a saving account how much you will have after 30 years interest is compound quarterly what is the value of the money from choice number 2? what is the value of the money from choice number 3? what is the value of the money from choice number 4? what is the value of the money from choice number 5?

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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You deposit $1.000 one year, $2000 next year and withdraw $1000 other year starting year I until year 30 with an interest rate of 5% one year., 6% next year, and 7% other year. How much money will you have at the end of year thirty if there are different interest rates as shown in the diagram belowe 1000 1000 1000 1000 26 28 29 30 2. 7% 5% 6% 7% 6% 7% S% 6% F? 1000 2000 1000 2000 2000 1000 2000 Select one: O a. 55698 O b. 45000 O c. 72333 O d. 56187 O e. 47566
How much should you pay for the promise of $2,000 in 5 years? Assume you would like to earn 4.5% per year. Group of answer choices 1. $1,865 2. $2,000 3. $2,100 4. $1,605
cash price wi00. Find the present value of the given future amount: $57,000 for 8 months at 10% simple interest (yearly). N101. What is the present value of $6,000 to be received at the end of 6 years if the discount rate is 12%? vol 102. Sardor has been offered an investment that will pay him $500 three years from today. If his opportunity cost is 7% compounded annually, what value should he place on this opportunity today? 103. A company has cost of debt of 6% and cost of equity of 15%. In this country, the corporate income tax rate is 20%. If the debt to equity ratio is 0.5, what is the WACC? 104. A company has cost of debt of 6% and cost of equity of 15%. In this country, the corporate income tax rate is 20%. If the company's debt to total capital ratio is 60%, what is the WACC?
A new investment opportunity for you is an annuity that pays $560 at the beginning of each year for 3 years. You could earn 5.4% on your money in other investments with equal risk. What is the most you should pay for the annuity? Group of answer choices $1,595.40 $1,756.86 $1,517.12 $1,442.76 $1,696.61
Assume you won a million dollars in the Texas Lottery. You have two options: 1) collect S426,000 now or 2) receive $50,000 a year (end-of-year) for the next 20 years. Which option would you opt for assuming a 10% interest rate? Use an Excel formula to justify your choice.
Suppose that Dmitri just won the lottery and must choose between three award options: 1. A lump sum of $40,000,000 received today 2. 15 end-of-year payments of $5,000,000 3. 40 end-of-year payments of $3,600,000 Assume the interest rate is 8.00%, entered as 8 on your financial calculator. Note: Take the absolute value of the present value when answering this question. Using a financial calculator yields a present value for option 2 of approximately and a present value for option 3 of approximately (when the interest rate is 8.00%). Based on this, Dmitri should choose option if he seeks to maximize present value. Now assume the interest rate is 9.00%, entered as 9 on your financial calculator. Note: Take the absolute value of the present value when answering this question. Using the table you just filled out and a financial calculator, yields a present value for option 2 of approximately and a present value for option 3 of approximately v (when the interest rate is 9.00%). Based on…
Show work please. Thank you
Suppose you just won the state lottery, and you have a choice between receiving $2,550,000 today or $270,000 a year for 18 years, with the first payment starting one year from today. What annual interest rate does the second choice provide? 6.75% 7.49% 7.89% 6.28%
Please answer my 2 question..
ATV commercial offers investors a perpetuity that will pay you $200 next year. The payment will then increase by 3.00% every year going forward. You would like a 7.00% on your investment. What is the value of this "offer" if the company can deliver what is promised? $206 $200 $5,000 $2,872
4. If you receive $116 each month for 28 years and the discount rate is 0.08, what is the present value? (show the process and can use financial calculator)
Imagine that you won $100 million in the lottery and were offered the choice between two payment plans: Plan A: Receive $61 million in a lump sum today Plan B: Receive an initial payment of $1.5 million today and annual payments that increase by 5% annually over the next 29 years (30 payments total) a. Determine the net present value of each plan without discounting. Which plan is the better option? b. Assuming an interest rate of 4%, determine the future value of each plan at the end of the 29 years with discounting. Which plan is the better option?

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