Based on a 4% discount rate, what is the 2020 present value of the costs of the three alternatives estimated to accrue over the next 4 years? Assume that costs are assessed (accrued) at the beginning of the year

Q: A property will provide $24,400 at the end of each year forever. If its value is $245,000, what must…

A: Annual Cash Flow = $24,400Perpetuity Value (Property Value) = $245,000

Q: Define effective (or equivalent) annual rate (EAR or EFF%)

A: The effective annual interest rate is the real return on reserve funds or savings account or other…

Q: The accrued obligation at the beginning of the year was S456,000 and the current service cost for…

A: Formula: Interest amount = Accrued Beginning obligation amount x Interest rate

Q: An obligation can be settled by making a payment of $16,000 now and a final payment of $30,000 in 3…

A: The time value of money states that the worth of the money received in the future is always lower…

Q: Present value of $200,000 that is expected to be received at the end of 1 year at a discount rate of…

A: Where, PV = Present ValueFV = Future Valuer = rate of returnn = number of periods

Q: An obligation can be settled by making a payment of $16,000 now and a final payment of $30,000 in 3…

A: The present value for both the options can be used as a basis for comparision between the options.…

Q: Calculate the perpetual equivalent annual cost (years 1 to ∞) of $825,000 now and $1,000,000, 8…

A: Cost now (C0) = $ 825,000 Cost after 8 years (C8) = $ 1,000,000 Period (n) = 8 Years Interest rate…

Q: Please find the present value of $1,000,000 to be received 3 years from now, assuming a 5% discount…

A: The objective of this question is to calculate the present value of a future sum of money. In this…

Q: If the one-year spot rate is 7 percent and the two-year spot rate is 8.5 per- cent, what is the…

A: One-year forward rate over the second year is (1+two year spot rate)^2/(1+one year spot rate) -1

Q: Determine the discount rate assuming the PV of $1,000 at the end of 1 year is $980?

A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…

Q: What are total finance charges over that three-year period?

A: Finance charges = Total payment made  - Loan amount.

Q: Find the present value on August 10, 2020 of Php 25,000 due on December 18, 2020 at 4% compounded…

A: Present Value refers to the value of cash flows today which is to be received at some future time…

Q: What is the IRR for a $980 investment that returns $205 at the end of 6 years?

A: Internal rate of return: IRR  of a project is the discount rate which makes net present value of the…

Q: Determine the present value if $5,000 is received in the future (that is ,at the end of each…

A: Present Value: It is the present worth of the future annuity cash flow stream. Present value is…

Q: Determine the present values if OMR5,000 is received in the future (i.e., at the end of each…

A: The time value of money is used for computing the present and the future values of a given sum of…

Q: Using the appropriate PV​ table, compute the present value of the following​ amount: $24,000 payable…

A: Present value (PV) is the current value of a future sum of money or stream of cash flows given a…

Q: What is the present value of $9,500 to be received in 8 years if 7% is the proper discount rate?

A: Computation of present value: Hence, the present value is $5,529.09.

Q: Calculate the perpetual equivalent annual cost (years 1 to ∞) of $950,000 now and $775,000, 8 years…

A: In year 0,Cash flow= 950000 + 775000/(1 + 0.11)^8= 1286293.0346

Q: find (a) the future value after 9 years,  (b) the effective rate, and (c) the time to reach $10,000.…

A: Future value is the value of the current money or assets in future at a specific date. The value of…

Q: Find the present value of 11,600 due at the end of 7 years and 6 months if money is worth 4 ½%…

A: Future value (FV) = 11,600 Period = 7.50 Years Period in semi annual (N) = 7.50*2 = 15 Annual…

Q: What is the Effective Annual Return (EAR) if the Annual Percentage Rate (APR) is 15% compounded…

A: Effective annual return is the rate of return on the investment after taking the effects of…

Q: Using the information below and assuming a 30 year amortized 65% LTV at 7% rate what is the DSCR…

A: Let's break down the steps to calculate the DSCR ratio for 120 Jefferson in more detail,…

Q: Using the information below and assuming a 30 year amortized 65% LTV at 7% rate what is the DSCR…

A: The Loan to Value (LTV) ratio is the amount of the loan compared to the value of the property. In…

Q: Suppose that a stream of equal payments of amount $25000 per year is to continue in perpetuity. At…

A: Given information: Equal payments (C): $25,000 Interest rate (r) :10% We have to compute the value…

Q: What is the present value of $30 to be received at the beginning of each year for the next five…

A: Present Value of annuity due = pmt*[1-(1/(1+r)^n)/r]*(1+r) Where, Pmt = yearly payment i.e. $30 r…

Q: Assume a discount rate of 7 percent and calculate the effective rent over three years when net rent…

A: YearsRent amount1$232$413$55Discount rate=7%Required:Effective Rent=?

Q: If present cost of SR 30,000, annual costs of SR 3,500, periodic costs every five years of 7,500,…

A: Capitalized Cost (CC) is Net Present Value(NPV) for proposal having infinite life period which is…

Q: If money is worth 1.07%, determine the present value of perpetuity of P 4.489 pavable annually, with…

A: Inputs Interest Rate = 1.07% Perpetual Amount = 4489 Payments will start at end of 5 years

Q: Given the following adjusted closing price data and computed annual returns, compute the three-year…

A: Variables in the question:Formula to be used:Arithmetic average=

Q: ed at an annual rate c ona. What amount sh wear for 30 years aften

A: LU 13-2a 1.Present value is the amount of money which we invest today. Since it is semi annually so…

Q: A company is expected to result 700$ savings annually for the 7 years, if the rate of interest is…

A: Annual Benfit = $700 Interest Rate =10% Years = 7

Q: How can the initial investment be depreciated on a seven-year MACRS?

A: If a company purchases a fixed asset, the value of the asset cannot be same every year. The value of…

Q: Find the capitalized cost of a present cost of P800,000, annual costs of P55,000, and periodic costs…

A: Time value of money (TVM) refers to the method or technique which is used to measure the amount of…

Q: The future value of $500 to be received at the end of each year for seven years at adiscount rate of…

A: Computation of future value:Therefore, the future value is $4,461.40.

Q: You expect to receive 10 annual payments of $6,629, starting at the end of the year. How much are…

A: Number of Annual Payment = n = 10Annual Payment = p = $6629Discount Rate = r = 8.44%

Q: Find the annual effective rate of discount at which a payment of $300 immediately and $400 one year…

A:

Q: 1. Determine the discount rate assuming the PV of $1080 at the end of 1-year is $980

A: Discount rate is calculated using NPER function in excel

Q: At an interest rate of 10% per year, determine the perpetual equivalent annual cost of: $70,000 now,…

A: The cash flows that are started immediately after the investment and go on for an infinite time…

Q: 1000 dollars is deposited into an account at the beginning of the year and the value at the end of…

A: GIVEN, PRESENT VALUE=$1000 future value=$1276.30 n=5

Q: Assume that $464.03 invested today will grow to $8,106.65 at the end of 47 quarters. Determine the…

A: Initial investment=$464.03Future value=8106.65Period=47 quarters

Q: Determine the present worth of perpetual expenses that will sustain the replacement cost of…

A: Present worth or present value is defined as the amount of money which required to be invested for…

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.