Investment X offers to pay you $5,300 per year for eight years, whereas Investment Y offers to pay you $7,300 per year for five years. a. If the discount rate is 5 percent, what is the present value of these cash flows? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. b. If the discount rate is 15 percent, what is the present value of these cash flows? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. a. Investment X Investment Y b. Investment X Investment Y

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
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Investment X offers to pay you $5,300 per year for eight years, whereas Investment Y offers to pay
you $7,300 per year for five years.
a. If the discount rate is 5 percent, what is the present value of these cash flows?
Note: Do not round intermediate calculations and round your answers to 2 decimal places,
e.g., 32.16.
b. If the discount rate is 15 percent, what is the present value of these cash flows?
Note: Do not round intermediate calculations and round your answers to 2 decimal places,
e.g., 32.16.
a. Investment X
Investment Y
b. Investment X
Investment Y
Transcribed Image Text:Investment X offers to pay you $5,300 per year for eight years, whereas Investment Y offers to pay you $7,300 per year for five years. a. If the discount rate is 5 percent, what is the present value of these cash flows? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. b. If the discount rate is 15 percent, what is the present value of these cash flows? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. a. Investment X Investment Y b. Investment X Investment Y
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