Bertha bought a new home entertainment system today from Andre's Electronics. She will receive a cash-rebate of $232.00 from Andre's Electronics today, pay $15 1 year, receive a cash rebate of $1,638.00 from Andre's Electronics in 2 years, and pay $4,985.00 to Andre's Electronics in 4 years. If the discount rate is 18.38 percent, then what is the present value of the cash flows associated with this transaction? O $-1,744.87 (plus or minus 3 dollars) O $-2,211.42 (plus or minus 3 dollars) O $-530.14 (plus or minus 3 dollars) O $-1,200.61 (plus or minus 3 dollars) O none of the answers are within 3 dollars of the correct answer
Bertha bought a new home entertainment system today from Andre's Electronics. She will receive a cash-rebate of $232.00 from Andre's Electronics today, pay $15 1 year, receive a cash rebate of $1,638.00 from Andre's Electronics in 2 years, and pay $4,985.00 to Andre's Electronics in 4 years. If the discount rate is 18.38 percent, then what is the present value of the cash flows associated with this transaction? O $-1,744.87 (plus or minus 3 dollars) O $-2,211.42 (plus or minus 3 dollars) O $-530.14 (plus or minus 3 dollars) O $-1,200.61 (plus or minus 3 dollars) O none of the answers are within 3 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
Related questions
Question
Transcribed Image Text:Bertha bought a new home entertainment system today from Andre's Electronics. She will receive a cash-rebate of $232.00 from Andre's Electronics today, pay $719.00 to Andre's Electronics in
1 year, receive a cash rebate of $1,638.00 from Andre's Electronics in 2 years, and pay $4,985.00 to Andre's Electronics in 4 years. If the discount rate is 18.38 percent, then what is the present
value of the cash flows associated with this transaction?
O $-1,744.87 (plus or minus 3 dollars)
O $-2,211.42 (plus or minus 3 dollars)
O $-530.14 (plus or minus 3 dollars)
O $-1,200.61 (plus or minus 3 dollars)
O none of the answers are within 3 dollars of the correct answer
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 1 images
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education