An investment, which is worth $54,000.00 and has an expected return of 11.80 percent, is expected to pay fixed annual cash flows for a given amount of time. The first annual cash flow is expected in 1 year from today and the last annual cash flow is expected in 6 years from today. What is the present value of the annual cash flow that is expected in 3 years from today? O $10,516.47 (plus or minus 10 dollars) O $13,059.88 (plus or minus 10 dollars) O $9,345.74 (plus or minus 10 dollars) $11,681.46 (plus or minus 10 dollars) Onone of the answers are within 10 dollars of the correct answer

An investment, which is worth $54,000.00 and has an expected return of 11.80 percent, is expected to pay fixed annual cash flows for a given amount of time. The first annual cash flow is expected in 1 year from today and the last annual cash flow is expected in 6 years from today. What is the present value of the annual cash flow that is expected in 3 years from today? O $10,516.47 (plus or minus 10 dollars) O $13,059.88 (plus or minus 10 dollars) O $9,345.74 (plus or minus 10 dollars) $11,681.46 (plus or minus 10 dollars) Onone of the answers are within 10 dollars of the correct 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

If the current rate of interest is 5%, then the future value (FV) of an investment that pays $1,000 per year and lasts 15 years is closest to: A. $12,947 B. $25,895 C. $21,579 D. $30,211
How much is an asset with expected annual cashflows of $19,000 for 11 years worth today, if the appropriate discount rate is 4.7%? Round to the nearest dollar,
An investment will pay $500 two years from now, $841 four years from now, and $1,166 five years from now. You are going to reinvest these cash flows at a rate of 14.53 percent per year. What is the future value of this investment at the end of year five?
Could you please do this question with full working?
An investment makes annual payments. The first payment of $245 is due in one year at i = 1. The payments grow at a rate of 14.0% annually until t =14. Payments are then stable until t =32. Afterwards, payments grow at a rate of 2.0% annually (the payment at i =33 is 2.0% bigger that the payment at 1 =32) and are paid into perpetuity. a) What is the size of the cash flow at / =15? 2$ |(Give answer to 2 decimal places.) b) What is the size of the cash flow at t =33? |(Give answer to 2 decimal places.) c) What is the present value of the investment if the discount rate is 16.0%? | (Give answer to 2 decimal places.)
An investment costs $4,000 today. This investment is expected to produce annual cash flows of $1,200, $1,400, $ 1,300 and $1,100, respectively, over the next four years. What is the internal rate of return (IRR) ( or geometric average) on this investment? Question 23 options: 2.43 % 6.25 % 9.72% 31.25%
You are looking to invest in a project. The expected return of 5% is used as the discount rate. The initial investment is P6 million and the project will last for five years, with the following estimated cash flows per year: P500,000; P600,000.00; P700,000.00; P300,000.00; P200,000.00 and P100,000.00 respectively.. A. Compute for Net Present Value B. How many percent is the Internal rate of Return?
"Assume that the interest rate is 8.5% per year and you expect to receive the following stream of annual cash flows (The year 0 cash flow occurs today and the year 4 cash flow occurs exactly 4 years from today): (Year 0: $15,100); (Year 1: $21,100); (Year 2: $12,700): (Year 3: $19,250): (Year 4: $9,550); What is the current Present Value (PVO) of the stream of cash flows?" a)"$68,013- b)"$67,297" c)"$77,700 d)"$62,025" e)$64,399 f)$68,643"
An investment is expected to generate annual cash flows forever. The first annual cash flow is expected in 1 year and all subsequent annual cash flows are expected to grow at a constant rate annually. We know that the cash flow expected in 1 years from today is expected to be $50.00 and the cash flow expected in 4 years from today is expected to be $55.64. What is the cash flow expected to be in 3 years from today?(Round the value to 100th decimal)
An investment, which is worth $57,023.00 and has an expected return of 17.00 percent, is expected to pay fixed annual cash flows forever with the next annual cash flow expected in 1 year. What is the present value of the annual cash flow that is expected in 3 years from today? O $9,693.91 (plus or minus 3 dollars) O $35,603.48 (plus or minus 3 dollars) O $6,052.59 (plus or minus 3 dollars) O $8,285.39 (plus or minus 3 dollars) O none of the answers are within 3 dollars of the correct answer
An investment advisor offers you a product thatwill deliver cash-flows at the end of each of thenext seven years. The first cashflow is $5,000and every year thereafter, the cashflow will growat a rate of 4%. If the annual interest rate is2%, what is the present value of thisopportunity?
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?

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