Which of the following cash flows has the highest future value? A. $1000 invested for two years in the future when the interest rate is 4% B. $1000 invested for two years in the future when the interest rate is 6% ⚫C . $1000 invested for three years in the future when the interest rate is 4% D. $1000 invested for three years in the future when the interest rate is 6%

Which of the following cash flows has the highest future value? A. $1000 invested for two years in the future when the interest rate is 4% B. $1000 invested for two years in the future when the interest rate is 6% ⚫C . $1000 invested for three years in the future when the interest rate is 4% D. $1000 invested for three years in the future when the interest rate is 6%

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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7. Future value of annuities There are two categories of cash flows: single cash flows, referred to as "lump sums," and annuities. Based on your understanding of annuities, answer the following questions. Which of the following statements about annuities are true? Check all that apply. O An annuity is a series of egual payments made at fixed intervals for a specified number of periods. O Ordinary annuities make fixed payments at the beginning of each period for a certain time period. O An annuity due is an annuity that makes a payment at the beginning of each period for a certain time period. O An annuity due earns more interest than an ordinary annuity of equal time. Which of the following is an example of an annuity? O An investment in a certificate of deposit (CD) A lump-sum payment made to a life insurance company that promises to make a series of equal payments later for some period of time Luana loves shopping for clothes, but considering the state of the economy, she has decided…
What is the future value at the end of year three of the following set of cash flows at an interest rate of 10% p.a. compounded annually? End of Year 1 $5,100 End of Year 2 $2,300 End of Year 3 $1,150 Select one: a. $8,550 b. $9,966 c. $9,851 d. $9,581
find the equivalent value of this cash flow at year 5 where i=5% NOTE: if you need to calculate the interest rate, always take the first 4 digits (0.xxxx) $200 Equivalent value? $500 3 9. 10 $300 а. 960 b. 945 c. 951 d. 955 e. 949 2.
A real estate investment has the following expected cash flows: Year Cash Flows 1 $14,000 2 19,000 3 19,000 4 25,000 The discount rate is 3 percent. What is the investment’s present value? Round your answer to 2 decimal places
Calculate the NPV of the following cash flows using a 10% discount rate? The first cashflow is negative, Year 0= -900, all others are positive Year 1= +100, Year 2= +100, Year 3= +400, Year 4= +500, Year 5= +500 a. $36 b. $ 520 c. $ 996 d. $ 326 e. $ 226
What is the present worth (P) of all the cash flows if F=16000, n=6 years, and i= 8% per year? Select one: O a. $16,480.00 b. $103,824.00 O c. $10,082.71 O d. $34,608.00
For the cash flows shown in the diagram, determine the value of x and 2x that will make the future worth in year 12 equal to $250,000. The value of x is determined to be $..... The value of 2x is determined to be $......
Assume that you are looking at 3 perpetuities. P1 has annual cash flows of $850 in Yeata 1 through infinity (1-infinity) and present value at Year 0 of $10,119.047619. P2 has annual cash flows of $620 in Yeara 11 through infinity (11-infinity) and same effective rate as P1. P3 has annual cash flows of $480 in Years 25 through infinity (25-infinity) and same effective rate as P1 and P2. Determine the value of all three perpetuities when evaluated at Year 35.
Cash Flow Series B Cash Flow Series C -$2,330 $2,870 $2,470 $2,070 $1,670 $1,270 Y Y Y - 2Y 2Y 2Y
Draw the cashflow diagram and solve using the formula
Determine the value of Z on the left-hand side of the cash flow diagram below that establishes equivalence with the right-hand side. The interest rate is 4% per year.
If you invest $8,800, what is your rate of return if you will receive the following cash flows at the end of these years: Yr. 1 $2,000; Yr. 2 $2,100; Yr. 3 $2,200; Yr. 4 $2,300; Yr. 5 $3,700?

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