An investment in Bonnie Capital consol bonds promises to provide an interest payment of $3.8 million per year in perpetuity. If the interest rate is 4.5%, what is the value of this investment?
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What is the value of this investment for these financial accounting question?
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- What is the present value of this investment?Quick answer of this accounting questionsAn investment is expected to result in equal payments of $3160.00 at the end of each of the next 5 years. (ordinary annuity) If the appropriate rate of return (discount rate) is 10%, what is the present value of the annuity stream? (annual compounding)
- An investment will pay S100 at the end of each of the next 3 years, $200 at the end of Year 4, 300 at the end of Year 5, and $500 at the end of Year 6. If other investments of equal risk earn 8% annually, what is this investment's present value? Its future value?Which of the following investments that pay will $18,500 in 8 years will have a higher price today? The security that earns an interest rate of 8.50%. The security that earns an interest rate of 12.75%.An investment will pay $150 at the end of each of the next 3 years, $300 at the end of Year 4, $600 at the end of Year 5, and incur a $500 cost at the end of Year 6. If other investments of equal risk earn 6.7% annually, what is this investment’s present value?
- An investment pays you $1000 at the end of each of the next 3 years. The investment will then pay you $2000 at the end of Year 4, $3000 at the end of Year 5, and $5000 at the end of Year 6. If the interest rate earned on the investment is 8 percent, what is its present value? What is its future value?a) At what annual interest rate would the following have to be invested? i) $500 to grow to $1,948.00 in 12 years ii) $300 to grow to $422.10 in 7 years iii) $50 to grow to $280.20 in 20 years iv) $200 to grow to $497.60 in 5 years b) You are considering invest ing in a security that will pay you $1,000 in 30 years. i) If the appropriate discount rate is 10 percent, what is the present value of this investment? ii) Assume these securities sell for $365, in return for which you receive $1,000 in 30 years. What is the rate of return investors earn on this security if they buy it for $365? USE EXCEL TO WORK THIS OUT AND SHOW THE FORMULA!An investment pays you $100 at the end of each of the next 3 years. The investment will then pay you $200 at the end of year 4, $300 at the end of year 5, and $500 at the end of year 6. If the rate of interest earned on the investment is 8%, what is the present value of this investment? What is its future value? How do you solve this with excel?
- An investment will pay $100 at the end of each of the next 3 years, $200 at the end of Year 4, $300 at the end of Year 5, and $600 at the end of Year 6. A. If other investments of equal risk earn 4% annually, what is its present value? Round your answer to the nearest cent. B. If other investments of equal risk earn 4% annually, what is its future value? Round your answer to the nearest cent.The amount of money originally put into an investment is known as the present value P of the investment. For example, if you buy a $50 U.S. Savings Bond that matures in 10 years, the present value of the investment is the amount of money you have to pay for the bond today. The value of the investment at some future time is known as the future value F. Thus, if you buy the savings bond mentioned above, its future value is $50. If the investment pays an interest rate of r (as a decimal) compounded yearly, and if we know the future value F for t years in the future, then the present value P = P(F, r, t), the amount we have to pay today, can be calculated using the formula below. P = F × 1 (1 + r)t We measure F and P in dollars. The term 1/(1 + r)t is known as the present value factor, or the discount rate, so the formula above can also be written as the following. P = F × discount rate (a) Explain what information the function P(F, r, t) gives you. The function…An investment promises to pay $6,000 at the end of each year for the next three years and $4,000 at the end of each year for years 4 through 7. Use Table II and Table IV or a financial calculator to answer the questions. Round your answers to the nearest cent. If you require a 11 percent rate of return on an investment of this sort, what is the maximum amount you would pay for this investment?$ Assuming that the payments are received at the beginning of each year, what is the maximum amount you would pay for this investment, given a 11 percent required rate of return?$