FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- What is the present value of an investment that will pay $1,000 in one year's time, and $1,000 every year after that, when the interest rate is 8%?arrow_forwardWhat is the present value of an investment that pays $190 at the end of year 1, $107 at the year of year 2, and $235 at the end of year 3 if this investment earns 5% annually? your answer should be to the nearest dollar. For example, if your answer is id=mce_marker50, then input as 150.arrow_forwardSuppose you have an investment offer that guarantees an average investment gain of $1,000 per year. (a) What is the average rate of change (in dollars per year) of this investment? $? per year (b) If the value of the investment today is $10,000, what will be the value (in dollars) of the investment in 2 years? $?arrow_forward
- Suppose you invest $3,000 today and receive $10,000 in 25 years. a. What is the internal rate of return (IRR) of this opportunity? b. Suppose another investment opportunity also requires $3,000 upfront, but pays an equal amount at the end of each year for the next 25 years. If this investment has the same IRR as the first one, what is the amount you will receive each year? a. What is the internal rate of return (IRR) of this opportunity? The IRR of this opportunity is%. (Round to two decimal places.) b. Suppose another investment opportunity also requires $3,000 upfront, but pays an equal amount at the end of each year for the next 25 years. If this investment has the same IRR as the first one, what is the amount you will receive each year? The periodic payment that gives the same IRR is $ (Round to the nearest cent.)arrow_forwardYou have an investment opportunity that requires an initial investment of $5,000 today and will pay $6,000 in one year. What is the rate of return of this opportunity? The rate of return for this opportunity is ____%.arrow_forwardYou have an opportunity to invest $ 50 comma 900 now in return for $ 59 comma 900 in one year. If your cost of capital is 7.6 %, what is the NPV of this investment?arrow_forward
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