**Investment Analysis: Present and Future Value Calculation**On January 1, a company invested in an asset with a useful life of 3 years. The company's expected rate of return is 10%. The cash flow and present and future value factors for the 3 years are as follows:| Year | Cash Inflow from the Asset | Present Value of $1 at 10% | Future Value of $1 at 10% ||------|----------------------------|----------------------------|--------------------------|| 1 | $8,000 | 0.91 | 1.10 || 2 | $9,000 | 0.83 | 1.21 || 3 | $10,000 | 0.75 | 1.33 |- All cash inflows are assumed to occur at year-end.- If the asset generates a positive net present value of $2,000, what was the amount of the original investment?Multiple choice answers:A. $30,991 B. $20,250 C. $33,991 D. $22,250

Let CFn be the cashflow in year n. CF1 = $8000 CF2 = $9000 CF3 = $10000 r = 10% Present value factor…

Answered: On January 1, a company invested in an…

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

See similar textbooks

Similar questions

In Year 1, Darw Inc. purchased equipment with an expected useful life of 5 years. The initial cost of the equipment was $85,000. Darw Inc.cost of capital is 12%. At the time it purchased the equipment, Darw Inc. projected the following cash inflows from use of the equipment: Year Projected Cash Inflow 1 $20,000 2 $30,000 3 $35,000 4 $25,000 5 $15,000 At the end of Year 5, the equipment had reached the end of its useful life. Darw Inc.determined that it had actually generated the following cash flows: Year Actual Cash Inflow $10,000 $20,000 $30,000 $30,000 $30,000 1) What was the net present value that Darw Inc. calculated for the equipment when the company purchased the asset?
For the cash flow revenues shown below, find the value of G that makes the equivalent annual worth in years 1 through 7 equal to $500. The interest rate is 6.00% per year. (Round the final answer to three decimal places.) Cash flow, $ Year 0 1 2 3 The value of G is $ 225.0 225.0+ G 225.0+2G Year 4 5 16 Cash flow, $ 225.0+36 225.0+4G 225.0+5G 225.0+66
Assume an investment of $100,000 is made today and is expected to earn a quoted interest rate of 9.20%. Compute the future value of the initial investment after 5 years (Column B), 25 years (Column C), and 45 years (Column D) at each compounding frequency in Column A (annual, semiannual, monthly, daily, and continuous). (A) (B) (C) (D) Frequency (m) FV (5 Years) FV (25 Years) FV (45 Years) 1 2 12 365 ∞
E1 - 27 - What is the future value (FV) after 6 years of the following investments: Payment $200 per month starting month 1. Interest Rate is 9% per year compounded quarterly, need in excel
Using the following partial table of present value of $1 at compound interest, the present value of $96,666 to be received 3 years hence with earnings at the rate of 6% a year is Year 6% 10% 12% 1 0.943 0.909 0.893 2 0.890 0.826 0.797 3 0.840 0.751 0.712 4 0.792 0.683 0.636 A..$61,479.58 b.$76,559.47 c.$66,022.88 d.$81,199.44 please give me answer
In Year 1, Darw Inc. purchased equipment with an expected useful life of 5 years. The initial cost of the equipment was $85,000. Darw Inc.cost of capital is 12%. At the time it purchased the equipment, Darw Inc. projected the following cash inflows from use of the equipment: Year Projected Cash Inflow 1 $20,000 2 $30,000 3 $35,000 4 $25,000 5 $15,000 At the end of Year 5, the equipment had reached the end of its useful life. Darw Inc.determined that it had actually generated the following cash flows: Year Actual Cash Inflow $10,000 $20,000 $30,000 $30,000 $30,000 2. Calculate the net present value that the equipment achieved, based on the actual cash inflows.
A financial instrument provides three future cash flows: 1. $1,406.01 at the end of 2 years 2. $2,596.43 at the end of 8 years 3. $1,172.62 at the end of 13 years Calculate the duration (D) of the financial instrument at a yield of 7% pa compounded yearly. Give your answer in years to 2 decimal places. D years
Write simple R code, calculate the interest earned on an investment of $2000, interest rate of 3%, compounded annually, for 1,2,3, .., 30 years.
An estimate has the following cost and revenue cash flows. The cash flows are assumed to occur at the end of the year. (a) If interest is 10%, find the net present worth, net future worth, and net annual equivalentworth.(b) Find the rate of return. (Hint: The guessing range is 25 to 30%).(c) Present a summary of the four methods Year Cost Revenue 0 $800 $0 1 - $450 2 - $425 3 - $400
4. Find the annualized returns for the following set of investments. Asset A HPR 10% В -6 8 Ꭰ 15 E 5 BCD Holding Period 8 months 15 months 2 Years 3 years 18 weeks
Find Simple Interest, A sum of $78000, is invested from March 13 until Dec 20 of the same year at 14.25% simple interest. using any two methods of computing Simple Interest:
Exxon-Mobil's receipts and disbursements are shown below. Calculate the future worth in year 7 at an interest rate of 8% per year. Year Cash Flow, S -6,000 1 5,000 2 4,000 3 5,000 4 5,000 -1,000 7,000 7 8,000 O $31,023.34 O S18,101.82 O $19,998.37 O 331,312.27

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

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

SEE MORE TEXTBOOKS