Q 1 please Choose the correct answers for the following questions:1. What is the annual equivalent interest rate of a cash flow of $500 received now, with apresent worth of $386.47 at an interest rate of 10% per year?a) 5%b) 10%c) 7.6931%d) 15%2. You expect to deposit the following cash flows at the end of years 1 through 5, ($1,000;$4,000; $9,000; $5,000; and $2,000) respectively. Alternatively, you could deposit a singleamount today at the beginning of year 1 (end of year 0). How large does the single depositneed to be today if you can earn 10% compounded annually? Hint: the present value today(t-0) is identical to the single cash flow amount.a) $15,633.62b) $21,000.00c) $25,178.10d) $27,695.913. What is the annual equivalent rate of an investment that pays 5% semi-annually?a) 5.25%b) 5.00%c) 4.75%d) 5.50%4. What is the present worth of a project that has an initial investment of $50,000 andgenerates annual cash inflows of $10,000 for 10 years, with a discount rate of 8%?b) $46,881a) $429,907c) $55,398d) $82,5005. An engineer borrowed P 10,000 at 12% interest and paid P 2,000 per annum for the last4 years. What does he have to pay at the end of the fifth year in order to pay off his loan?a) P 6,999.39b) P 6,292.93c) P 6,222.39d) P 6,922.93

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Description: Q 1 please Choose the correct answers for the following questions:1. What is the annual equivalent interest rate of a cash flow of $500 received now, with apresent worth of $386.47 at an interest rate of 10% per year?a) 5%b) 10%c) 7.6931%d) 15%2. You

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1. What is the annual equivalent interest rate of a cash flow of $500 received now, with a present worth of $386.47 at an interest rate of 10% per year? a) 5% b) 10% c) 7.6931% d) 15%

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 8EA: You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how...

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