A company has two investment opportunities. Alternative 1 (Alt. 1) pays $10,000 (inflow) two years from now, and $20,000 (inflow) four years from now. Alternative 2 (Alt. 2) pays $6,500 (inflow) at the end of every year for five years. Interest is 8.14% compounded annually. Which is the preferable alternative? Round the values for PV to the nearest cent. TWO YEARS P/Y C/Y N I/Y PV PMT FV SA Alt. 1 = $ $ GA do Alt. 2 = $ % EA FOUR YEARS % GA $ FIVE YEARS Write the Discounted Cash Flow (DCF) for Alt. 1 and Alt. 2. Enter positive values for Alt. 1, and Alt. 2, rounded to the nearest dollar. Choice Select an answer % +

A company has two investment opportunities. Alternative 1 (Alt. 1) pays $10,000 (inflow) two years from now, and $20,000 (inflow) four years from now. Alternative 2 (Alt. 2) pays $6,500 (inflow) at the end of every year for five years. Interest is 8.14% compounded annually. Which is the preferable alternative? Round the values for PV to the nearest cent. TWO YEARS P/Y C/Y N I/Y PV PMT FV SA Alt. 1 = $ $ GA do Alt. 2 = $ % EA FOUR YEARS % GA $ FIVE YEARS Write the Discounted Cash Flow (DCF) for Alt. 1 and Alt. 2. Enter positive values for Alt. 1, and Alt. 2, rounded to the nearest dollar. Choice Select an answer % +

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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Similar questions

How much will $3,000 invested at the end of each year grow to in 4 years, assuming an interest rate of 11% compounded annually? Note: Use tables, Excel, or a financial calculator. Round your final answer to the nearest whole dollar. (FV of $1, PV of $1, FVA of $1, and PVA of $1). Multiple Choice $13,663 $14,129 О $12,729 $13,200
An investment will pay you $43,000 in 10 years. If the appropriate discount rate is 7 percent compounded daily, what is the present value? (Use 365 days a year. Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))
Mike Derr Company expects to earn 8% per year on an investment that will pay $616,000 seven years from now. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round "Table Factor" to 4 decimal places.) Compute the present value of this investment. Future Value Table Factor Present Value
The cost of utilities (e.g. water and electricity) of a company is expected to increase at a rate of $500 per year. Determine how many years it will take for the equivalent annual cost to be $18,000 if the interest rate is 5% per year and the cost at the end of next year (Year 1) is $10,000. Plz do fast asap
An $80,000 investment yields an annual return of $14,814.81 the first year; thereafter, annual returns increase at an annual rate of 4%. Based on a MARR of 6%, what is the discounted payback period for the investment? Looking for n = years
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Mike Derr Company expects to earn 8% per year on an investment that will pay $616,000 ten years from now. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round "Table Factor" to 4 decimal places.) Compute the present value of this investment. Future Value 616,000 X Table Factor Present Value
ali business with 780000 is expected to grow at 10% per year compounded annually for the next 4 years. Find (a) the expected future value (b) if funds from sale of the business today would be placed in an account yielding 6% compounded semi annually, what would be the minimum acceptable price for the business at this time
An investment will pay you $86, 000 in three years. Assume the appropriate discount rate is 7.5 percent compounded daily. What is the present value? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Use 365 days in a year.
An investment of $80,000 yields a net income of $10,000 per year. How many years does it toketo recover the initial investment ot nominol interest of 6.5% compounded quarterly? You canuse the spreadsheet functions to solve this question or trial and error procedurea. 16 b.12c.15d.14 e.11

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