PRIN.OF CORPORATE FINANCE
13th Edition
ISBN: 9781260013900
Author: BREALEY
Publisher: RENT MCG
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Question
Chapter 2, Problem 7PS
a.
Summary Introduction
To determine: The
b.
Summary Introduction
To determine: The future value if the rate is 6% and time is 20 years.
c.
Summary Introduction
To determine: The future value if the rate is 4% and time is 10 years.
d.
Summary Introduction
To determine: The future value if the rate is 4% and time is 20 years.
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Students have asked these similar questions
answer if its true or false
Based on the following information calculate the
value at time 2 of the investment made at time
zero. This future value is equal to 108.
time
discount
investment
(years)
rate
8%
100
1
2
answer if its true or false
1)
Based on the following information calculate the
value at time 2 of the investment made at time
zero. This future value is equal to 113.
discount
time
investment
(years)
rate
6%
100
1
answer if its true or false
1)
Based on the following information calculate the
value at time 1 of the investment made at time
zero. This future value is between 103 and 105.
time
discount
investment
(years)
rate
6%
100
1
Chapter 2 Solutions
PRIN.OF CORPORATE FINANCE
Ch. 2 - (FV) In 1880, five aboriginal trackers were each...Ch. 2 - Prob. 2SQCh. 2 - (PV) Your company can lease a truck for 10,000 a...Ch. 2 - (RATE) Ford Motor stock was one of the victims of...Ch. 2 - Prob. 5SQCh. 2 - Prob. 6SQCh. 2 - Prob. 7SQCh. 2 - (NOMINAL) What monthly compounded interest rate...Ch. 2 - Opportunity cost of capital Which of the following...Ch. 2 - Opportunity cost of capital Explain why we refer...
Ch. 2 - Prob. 3PSCh. 2 - Compound interest New Savings Bank pays 4%...Ch. 2 - Compound interest In 2017, Leonardo da Vincis...Ch. 2 - Future values If you invest 100 at an interest...Ch. 2 - Prob. 7PSCh. 2 - Future values In the five years preceding the end...Ch. 2 - Discount factors a. If the present value of 139 is...Ch. 2 - Prob. 10PSCh. 2 - Prob. 11PSCh. 2 - Present values What is the PV of 100 received in:...Ch. 2 - Prob. 13PSCh. 2 - Present values A factory costs 800,000. You reckon...Ch. 2 - Present values Recalculate the NPV of the office...Ch. 2 - Present values and opportunity cost of capital...Ch. 2 - Perpetuities An investment costs 1,548 and pays...Ch. 2 - Perpetuities You have just read an advertisement...Ch. 2 - Growing perpetuities A common stock will pay a...Ch. 2 - Prob. 20PSCh. 2 - Prob. 21PSCh. 2 - Annuities Kangaroo Autos is offering free credit...Ch. 2 - Annuities David and Helen Zhang are saving to buy...Ch. 2 - Prob. 24PSCh. 2 - Annuities Several years ago, The Wall Street...Ch. 2 - Prob. 26PSCh. 2 - Prob. 27PSCh. 2 - Prob. 28PSCh. 2 - Prob. 29PSCh. 2 - Annuities due A store offers two payment plans....Ch. 2 - Amortizing loans A bank loan requires you to pay...Ch. 2 - Amortizing loans Suppose that you take out a...Ch. 2 - Future values and annuities a. The cost of a new...Ch. 2 - Prob. 34PSCh. 2 - Growing annuities You are contemplating membership...Ch. 2 - Prob. 36PSCh. 2 - Growing perpetuities and annuities Your firms...Ch. 2 - Compounding intervals A leasing contract calls for...Ch. 2 - Compounding intervals Which would you prefer? a....Ch. 2 - Compounding intervals You are quoted an interest...Ch. 2 - Prob. 41PSCh. 2 - Continuous compounding How much will you have at...Ch. 2 - Continuous compounding The continuously compounded...Ch. 2 - Prob. 44PSCh. 2 - Annuities Use Excel to construct your own set of...Ch. 2 - Declining perpetuities and annuities You own an...
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Similar questions
- Find the PV and FV of an investment that makes the following end-of-year payments. The interest rate is 8%. Year Payment 1 100 2 200 3 400 Rate = 8% To find the PV, use the NPV function: PV = Year Payment x (1 + I )^(N-t) = FV1 100 1.17 116.64 2 200 1.08 216.00 3 400 1.00 400.00 Sum = ?PV = ?FV of PV = ?arrow_forwardInvestment If $5000 is invested for 6 years atinterest rate r (as a decimal), compounded annually, the future value of the investment is given byS = 5000(1 + r) 6dollars.a. Find the future value of this investment for selectedinterest rates by completing the following table. b. Graph this function for 0 <= r <= 0.20.c. Compute the future value if the rate is 10% and20%. How much more money is earned at 20%?arrow_forwardj. Find the PV and the FV of an investment that makes the following end-of-year payments. The interest rate is 8%. Year 1 $100, Year 2 $200, Year 3 $400 Year Payment 1 100 2 200 3 400 Rate 8% To find the PV, use the NPV function: Pv= $581.59 Year Payment x (1+ I)^(N- t) = FV 1 100 2 200 3 400arrow_forward
- Solve the following problem using the present worth analysis for an interest rate of 8%. Alt. A Alt. B Alt. B Initial cost $1,700 $2,100$3,750 Benefit/year 1,000 |1,000 1,000 Life in years|2 3 6arrow_forwardDetermine the present value P you must invest to have the future value A at simple interest rate r after time t. A = $19,000, r = 11.5%, t = 4 years The present value that must be invested to get $19,000 after 4 years at an interest rate of 11.5% is $. (Round up to the nearest cent.)arrow_forwardj. Find the PV and the FV of an investment that makes the following end-of-year payments. The interest rate is 10%. Payment $100 $300 $500 Year 1 2 3 Round your answers to the nearest cent. PV of investment: $ FV of investment: $arrow_forward
- Determine the present value P you must invest to have the future value A at simple interest rate r after time t. A = $14,000, r = 7.5%, t = 8 yearsarrow_forwardPlease show working Please answer a , b and c a. An investment will pay $50 at the end of each of the next 3 years, $200 at the end of Year 4, $350 at the end of Year 5, and $500 at the end of Year 6. If other investments of equal risk earn 9% annually, what is its present value? Its future value? Do not round intermediate calculations. Round your answers to the nearest cent. Present value: $ __________ Future value: $ ___________ b. Your parents will retire in 20 years. They currently have $340,000 saved, and they think they will need $1,250,000 at retirement. What annual interest rate must they earn to reach their goal, assuming they don't save any additional funds? Round your answer to two decimal places. ___________ % c. If you deposit $2,000 in a bank account that pays 8% interest annually, how much will be in your account after 5 years? Do not round intermediate calculations. Round your answer to the nearest cent.arrow_forwardCompute the number of years (t) if future value (FV) = $5575, present value (FV) = $1812, and interest rate (r) = 9.1%,arrow_forward
- Determine the present value P that must be invested to have the future value A at simple interest rate rather time A = $4000.00, r= 11.0%, t = 6 monthsarrow_forwardDetermine the present value P that must be invested to have the future value A at simple interest rate r after time t. A = $5500, r = 7%, t = 4 years (Round up to the nearest cent.)arrow_forward18. Compute the future value of a $100 investment for the following combinations of rates and times:a) r = 6.3%, t = 10 yearsb) r = 6.3%, t = 20 yearsc) r = 4.3%, t = 10 yearsd) r = 4.3%, t = 20 yearsarrow_forward
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