Option 1 Option 2 Option 3 Payment Today $ 90,000 Payment in One Year 45,000 $ 0 49,500 103,500 Total Payment $ 90,000 94,500 103,500 Required: 1-a. Assuming an annual discount rate of 11%, calculate the present value and the total cost. 1-b. Which option's cost has the lowest present value? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Assuming an annual discount rate of 11%, calculate the present value and the total cost. Note: Use tables, Excel, or a financial calculator. Round your answers to 2 decimal places. (FV of $1, PV of $1, FVA of $1, and PVA of $1) Option 1 Payment Today $ 90,000 Present Value of Payment in One Total Present Value (or Total Year Cost) $ Option 2 45,000 Option 3 0 0 S 40,540 54 0.00 90,000.00 130,540.54 0.00
Option 1 Option 2 Option 3 Payment Today $ 90,000 Payment in One Year 45,000 $ 0 49,500 103,500 Total Payment $ 90,000 94,500 103,500 Required: 1-a. Assuming an annual discount rate of 11%, calculate the present value and the total cost. 1-b. Which option's cost has the lowest present value? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Assuming an annual discount rate of 11%, calculate the present value and the total cost. Note: Use tables, Excel, or a financial calculator. Round your answers to 2 decimal places. (FV of $1, PV of $1, FVA of $1, and PVA of $1) Option 1 Payment Today $ 90,000 Present Value of Payment in One Total Present Value (or Total Year Cost) $ Option 2 45,000 Option 3 0 0 S 40,540 54 0.00 90,000.00 130,540.54 0.00
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:Option 1
Option 2
Option 3
Payment
Today
$ 90,000
Payment in One
Year
45,000
$ 0
49,500
103,500
Total
Payment
$ 90,000
94,500
103,500
Required:
1-a. Assuming an annual discount rate of 11%, calculate the present value and the total cost.
1-b. Which option's cost has the lowest present value?
Answer is complete but not entirely correct.
Complete this question by entering your answers in the tabs below.
Req 1A
Req 1B
Assuming an annual discount rate of 11%, calculate the present value and the total cost.
Note: Use tables, Excel, or a financial calculator. Round your answers to 2 decimal places. (FV of $1, PV of $1, FVA of $1,
and PVA of $1)
Option 1
Payment
Today
$ 90,000
Present Value of
Payment in One
Total Present
Value (or Total
Year
Cost)
$
Option 2
45,000
Option 3
0
0
S
40,540 54
0.00
90,000.00
130,540.54
0.00
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