A company has two investment opportunities. Alternative 1 (Alt. 1) pays $8,000 (inflow) two years from now, and $26,000 (inflow) four years from now. Alternative 2 (Alt. 2) pays $8,000 (inflow) at the end of every year for five years. Interest is 6.71% 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 % $ FOUR YEARS % 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.

A company has two investment opportunities. Alternative 1 (Alt. 1) pays $8,000 (inflow) two years from now, and $26,000 (inflow) four years from now. Alternative 2 (Alt. 2) pays $8,000 (inflow) at the end of every year for five years. Interest is 6.71% 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 % $ FOUR YEARS % 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.

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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Complete the following analysis of investment alternatives and select the preferred alternative. The study period is three years and the MARR = 15% per year. Alternative Alternative Alternative A B C Capital investment Annual revenues Annual costs Market value at EOY 3 PW (15%) Click the icon to view the interest and annuity table for discrete compounding when i=15% per year. OA. Alternative A OB. Alternative C OC. Alternative B OD. Do Nothing $11,000 3,900 240 4,900 578 The PW of the alternative B is $ (Round to the nearest dollar.) Select the preferred alternative. Choose the correct answer below. $15,000 6,500 450 6,100 ??? $13,100 5,500 400 2,800 385
A business worth $180,000 is expected to grow at 12% per year compounded annually for the next 4 years. (a) Find the expected future value. (b) If funds from the sale of the business today would be placed in an account yielding 8% compounded semiannually, what would be the minimum acceptable price for the business at this time?
If 36,400 dollars is invested at an interest rate of 7 percent per year, find the value of the investment at the end of 5 years for the following compounding methods. (a) what is the Annual: (b) what is the Semiannual: (c) what is the Monthly: (d) what is the Daily:
Assume that an investment, with a single initial cost of $1,000 and a yield of $50 monthly for 10 years, had a 7% IRR in the 60th month and a 7.2% IRR five months later. The IRR can be 6.8% in the 62nd month. I don't now how to solve this problem can you provide an explanation on how to solve this problem?
Consider the following investment. (Round your answers to the nearest cent.) $5,600 at 6 3/4% compounded quarterly for 8 1/2 years (a) Find the future value of the given amount.$ (b) Interpret the future value of the given amount. After 8 1/2 years, the investment is worth $ .
A fixed interest investment is growing at 2.9% per year. Its current value is $3500. a.) What will be the value of the investment eight years from now? b.) what was the value of the investment three years ago? c.) what will be the value of the investment m months from now?
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
Calculate the present value PV (in dollars) of an investment that will be worth $1,000 at the stated interest rate after the stated amount of time. (Round your answer to the nearest cent.) 5 years, depreciating 4% each year
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
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 $ Alt. 1 = $ % Alt. 2 = $ $ FOUR YEARS % GA SA 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 →

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