Loose Leaf for Foundations of Financial Management Format: Loose-leaf
17th Edition
ISBN: 9781260464924
Author: BLOCK
Publisher: Mcgraw Hill Publishers
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Chapter 9, Problem 7P
Your uncle offers you a choice of
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Your Dad has offered to give you some money and asks that you choose one of the following two alternatives:
$10,000 today or $11,000 one year from now.
Which offer will you choose? Explain the basis of your choice?
Your uncle offers you a choice of $106,000 in 10 years or $43,000 today. Use Appendix B as an approximate answer, but calculate
your final answer using the formula and financial calculator methods.
a-1. If money is discounted at 9 percent, what is the present value of the $106,000? (Do not round intermediate calculations. Round
your final answer to 2 decimal places.)
Present value
a-2. Which offer should you choose?
$106,000 after 10 years
O $43,000 today
As the beneficiary of a life insurance policy, you have two options for receiving the insurance proceeds. You can receive a lump sum of $200,000 today or receive payments of $1,400 a month for 20 years. If you can earn 6 % annual rate on your money, which option should you take and why?
Group of answer choices
You should accept the payments because they are worth $336,000 to you today.
You should accept the payments because they are worth $247,800 to you today.
You should accept the $200,000 because the payments are only worth $189,311 to you today.
You should accept the payments because they are worth $209,414 to you today.
You should accept the $200,000 because the payments are only worth $195,413 to you today.
Chapter 9 Solutions
Loose Leaf for Foundations of Financial Management Format: Loose-leaf
Ch. 9 - Prob. 1DQCh. 9 - How is the present value of a single sum related...Ch. 9 - Prob. 3DQCh. 9 - Does inflation have anything to do with making a...Ch. 9 - Adjust the annual formula for a future value of a...Ch. 9 - If, as an investor, you had a choice of daily,...Ch. 9 - What is a deferred annuity? (LO9-4)Ch. 9 - Prob. 8DQCh. 9 - Prob. 1PCh. 9 - Prob. 2P
Ch. 9 - a. What is the present value of $140,000 to be...Ch. 9 - If you invest $9,000 today, how much will you have...Ch. 9 - Prob. 6PCh. 9 - Your uncle offers you a choice of $105,000 in 10...Ch. 9 - Your father offers you a choice of $105,000 in 12...Ch. 9 - Prob. 9PCh. 9 - How much would you have to invest today to receive...Ch. 9 - If you invest $8,500 per period for the following...Ch. 9 - Prob. 12PCh. 9 - Mrs. Crawford will receive $7,600 a year for the...Ch. 9 - Phil Goode will receive $175,000 in 50 years. His...Ch. 9 - Sherwin Williams will receive $18,500 a year for...Ch. 9 - Carrie Tune will receive $19,500 for the next 20...Ch. 9 - The Clearinghouse Sweepstakes has just informed...Ch. 9 - Prob. 18PCh. 9 - Prob. 19PCh. 9 - Prob. 20PCh. 9 - At a growth (interest) rate of 10 percent...Ch. 9 - Prob. 22PCh. 9 - Prob. 23PCh. 9 - Prob. 24PCh. 9 - Juan Garza invested $20,000 10 years ago at 12...Ch. 9 - Prob. 26PCh. 9 - Prob. 27PCh. 9 - Prob. 28PCh. 9 - Prob. 29PCh. 9 - You need $28,974 at the end of 10 years, and your...Ch. 9 - Prob. 31PCh. 9 - Prob. 32PCh. 9 - Prob. 33PCh. 9 - Prob. 34PCh. 9 - Prob. 35PCh. 9 - Prob. 36PCh. 9 - Prob. 37PCh. 9 - Del Monty will receive the following payments at...Ch. 9 - Prob. 39PCh. 9 - Prob. 40PCh. 9 - Prob. 41PCh. 9 - Prob. 42PCh. 9 - Prob. 43PCh. 9 - Prob. 44PCh. 9 - Prob. 45PCh. 9 - Your younger sister, Linda, will start college in...
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- Your uncle offers you a choice of $103,000 in 10 years or $35,000 today. Use Appendix B as an approximate answer, but calculate your final answer using the formula and financial calculator methods. a-1. If money is discounted at 11 percent, what is the present value of the $103,000? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)arrow_forwardYour aunt offers you a choice of $21,200 in 20 years or $670 today. Use Appendix B as an approximate answer, but calculate your final answer using the formula and financial calculator methods. a-1. If money is discounted at 19 percent, what is the present value of the $21,200? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Present value a-2. Which offer should you choose? O $21,200 in 20 years O $670 today Prav 3 of 10 Nextarrow_forwardAssume that you just inherited an annuity that will pay you $10,000 per year for 10 years, with the first payment being made today. A friend of your mother offers to give you $60,000 for the annuity. If you sell it, what rate of return would your mother’s friend earn on his investment? If you think a “fair” return would be 6%, how much should you ask for the annuity? What keys do I need to enter in a financial calculator to get the answers of (13.70%, $78,016.92)/ only show me the keys to enter in a financial calculaotr. not excel and not algebraarrow_forward
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