Which is more valuable to you today--receiving $5,000 for each of the next 3 years OR receiving $15,000 in 3 years from now? Explain. (Be sure to discuss the concept of the "time value of money" when providing you

Which is more valuable to you today--receiving $5,000 for each of the next 3 years OR receiving $15,000 in 3 years from now? Explain. (Be sure to discuss the concept of the "time value of money" when providing you

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Answer the following questions in full sentences and clearly. Be sure to have answered with an explanation and answer each question separately. Question 1: Is long term financial planning worth the short term sacrifices? Question 2A: Would you rather receive a check for $1,000 today or $1,300 in 5 years from now? Explain. Question 2B: Which option would more likely yield you more money in five years? Question 2C: Why might it be hard for many of us to be able to think that far ahead into the future?
(Future value of an annuity) Imagine that Homer Simpson actually invested the $160,000 he earned providing Mr. Burns entertainment 9 years ago at 10.5 percent annual interest and that he starts investing an additional $1,900 a year today and at the beginning of each year for 20 years at the same 10.5 percent annual rate. How much money will Homer have 20 years from today? Question content area bottom Part 1 The amount of money Homer will have 20 years from now is $enter your response here. (Round to the nearest cent.)
Q4) You have $10,000 in your bank account today and you wish to start saving for your first car, estimated to cost $17,180 in 8 years’ time. Calculate the interest rate you would need for your savings to compound.
Suppose you just won the state lottery, and you have a choice between receiving $2,515,000 today or a 20-year annuity of $220,000, with the first payment coming one year from today. What rate of return is built into the annuity? Disregard taxes. O a. 6.88% O b. 12.96% O c. 6.04% O d. 5.69% O e. 8.75%
1. Today, the maximum amount of money that Ramesh is willing to pay for a certain perpetuity is $2,000. Assuming the interest rate and the annual payments remain the same, what is the maximum amount of money that Ramesh should be willing to pay for the same perpetuity exactly two years from today? a. Any amount greater than $2000.00 but less than $2332.80, if the discount rate is more than 8% p.a. \ b. Any amount greater than $1714.68 but less than $2000.00 if the discount rate is less than 8% p.a. c. Any amount less than $1714.68 if the discount rate is less than 8% p.a. d. Any amount greater than $2332.80 if the interest rate is more than 8% p.a. e. None of the answers listed above is correct.
2. You want to set up a savings plan for your business that you want to pursue 3 years from now. You assume that in order to start such business you need P310,000 in the bank. How much do you need to save each year in order to have the necessary funds if the current rate of interest is 8.1%? Assume that end-of-year payments are made. Illustrate the cash flow diagram to support your answer.
As a result of winning the Gates Energy Innovation Award, you are awarded a growing perpetuity. The first payment will occur in a year and will be for $25,000. You will continue receiving monetary awards annually with each award increasing by 5 percent over the previous award, and these monetary awards will continue forever. If the appropriate interest rate is 13 percent, what is the present value of this award? Question content area bottom Part 1 The present value of the award is $
Answer the following questions: 1) Consider the following cash flow: You will receive $500 at the end of years 3 and 4 and $1,000 at the end of year 5. If the interest rate is 7%, what amount received at the present is equivalent to this cash flow? 2) Given the cash flow in the figure below, and i=10% per year. Find V4 (or equivalent worth at n=4) $200 $150 $120 $100 $100 $80 Years 6. 3. 5 Base period 3) Given the cash flow in the figure below, and i=8% per year. Find V3, V4 and V5 (or equivalent worth at third, fourth and fifth year) Rs 500 Rs 400 Rs 300 Rs 200 Rs 80 Rs 80 Rs 40 Years 1 Base period 4) If you want to receive 100,000 $ after 5 years from your bank account, what is the amount that you have to deposit now, if the bank gives 10% interest accumulated annually? 5) A person deposits $5000 now in an account at 14% compounded annually. He wants to withdraw the money when it becomes $ 20,000. How long time will he wait for?
Can you tell me how did they get RM18785.79 as a future value by using a formula? Suppose we should use FVA formula right? ***I'm asking about the Uncle Murray questions that promised to give RM1000 a month for 18 months starting today and save it in a bank account that pays 6% compounded monthly.** Thank you for helping me :)
As a result of winning the Gates Energy Innovation Award, you are awarded a growing perpetuity. The first payment will occur in a year and will be for $ 30,000. You will continue receiving monetary awards annually with each award increasing by 7 percent over the previous award, and these monetary awards will continue forever. If the appropriate interest rate is 14 percent, what is the present value of this award? Question content area bottom Part 1 The present value of the award is $ enter your response here . (Round to the nearest cent.)
1) What is the future value of $5480 6 years from now at 7 percent? 2) What is the future value of $2100 saved each year for 9 years at 10 percent? 3) What is the amount a person would have to deposit today (present value) at 11 percent interest rate to have $8500 saved 9 years from now. 4) What is the amount you would have to deposit today to be able to take out $2070 a year for 2 years from an account earning 14 percent. 5) If you desire to have $38300 for a down payment for a house in 11 years, what amount would you need to deposit today? Assume that your money will earn 4 percent. 6) If you desire to have $38300 for a down payment for a house in 11 years, what amount would you need to deposit today? Assume that your money will earn 4 percent. 7) Carla Lopez deposits $11100 a year into her retirement account. If these funds have an average earning of 3 percent over the 14 years until her retirement, what will be the value of her retirement account? 8) If a person spends $28 a week…
you have just won the lottery and will receive $460,000 in one year. you will receive payments for 21 years, and the payments will increase 4 percent per year. if the appropriate discount rate is 11 percent, what is the present value of your winnings? Please explain how to solve using the financial calculator to show and explain steps thanks