Present Value Interest FactorsNumber of Periods123455%9524.9070863882277835Multiple ChoiceInterest Rates15%86967561657557184972The calculation of 1/r(wherer interest rate).10%90918264751368306209You are given the table above to calculate the present value of the future cash flows of an investment. What do the values in thetable represent?20%83336944578748234019The calculation of (1+r)(wherer interest rate and t-number of perlods).

The table consists of the different number of time periods (usually the number of years) and the…

Present Value Interest Factors Number of Periods 1 2 3 4 5 5% 9524 .9070 8638 8227 7835 Interest Rates 15% 8696 7561 6575 10% 9091 8264 7513 6830 6209 5718 4972 20% 8333 .6944 5787 4823 4019 You are given the table above to calculate the present value of the future cash flows of an investment. What do the values in th table represent?

Present Value Interest Factors Number of Periods 1 2 3 4 5 5% 9524 .9070 8638 8227 7835 Interest Rates 15% 8696 7561 6575 10% 9091 8264 7513 6830 6209 5718 4972 20% 8333 .6944 5787 4823 4019 You are given the table above to calculate the present value of the future cash flows of an investment. What do the values in th table represent?

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

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4. Present value Finding a present value is the reverse of finding a future value. Which of the following is true about finding the present value of cash flows? -Finding the present value of cash flows tells you what a cash flow will be worth in future years at a specified rate of return. -Finding the present value of cash flows tells you how much you need to invest today so that it grows to a given future amount at a specified rate of return. Which of the following investments that pay will $18,000 in 4 years will have a lower price today? -The security earns an interest rate of 4.00%. -The security earns an interest rate of 6.00%.
Consider the following cash flows: Year 0 1 2 Cash Flow -$ 32,500 13,800 17,900 11, 200 What is the IRR of the cash flows? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. Internal rate of return %
Consider the following cash flows: Year Cash Flow 0 1 2 3 $19,400 10,400 9,320 6,900 What is the IRR of the above set of cash flows? (Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Internal rate of return 4 Prev
Consider the following cash flows: Year Cash Flow 0123 $19,400 10,400 9,320 6,900 What is the IRR of the above set of cash flows? (Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Internal rate of return 96
1.4 The table represents the cash flows received from the investments at the end year. Each investment requires an initial investment of $1000. Answer the questions related to the two investment opportunities in the table below. Year 1 2 3 4 5 Investment A 225 215 250 225 205 Investment B 220 225 250 250 210 There are two approaches to evaluate this investment. Show the necessary calculations. • Assume the interest rate ot 4.33%. Use present value analysis to determine which investment you should choose? Calculating the rate of returns of the investment, which investment would you choose and why?
What is the present value of an investment with the following cash flows? Year 1 $14,000 Year 2 $20, 000 Year 3 $30,000 Year 4. $ 43,000 Year 5. $ 57,000 Use a 7% discount rate, and round your answer to the nearest $1. a. $128, 487 b. $107, 328 c. $112, 346 d. $ 153, 272
How do you calculate net investment in working capital, net cash flows, present value of net cash flows, and NPV? WACC is 10.10%
For the investment shown in the following table, calculate the total return earned over the unspecified time period. Cash flow during period Beginning-of- period value End-of- period value −$10 $3,200 $2,800 The total return on the investment is __%.
16)For the following stream of free cash flows, calculate the internal rate of return. Year 0 1 2 3 4 5 Free Cash Flows -45,452 10,005 14,921 12,537 10,452 21,455 Group of answer choices 14.5% 12.7% 13.9% 11.5%
For each of the investments below, calculate the rate of return earned over the period. Investment ABCDE Cash Flow During Beginning-of-Period End-of-Period Value Period Value - $400 13,000 4,000 60 1,700 $1,700 140,000 60,000 800 14,500 $800 117,000 46,000 400 12,600
Average Rate of Return, Cash Payback Period, Net Present Value Method for a Service Company Spanish Peaks Railroad Inc. is considering acquiring equipment at a cost of $176,000. The equipment has an estimated life of 10 years and no residual value. It is expected to provide yearly net cash flows of $44,000. The company's minimum desired rate of return for net present value analysis is 12%. Present Value of an Annuity of $1 at Compound Interest 15% Year 6% 10% 12% 20% 1 0.943 0.909 0.893 0.870 0.833 1.736 2 1.833 1.690 1.626 1.528 2.673 2.283 2.487 2.402 2.106 4 3.465 3.170 3.037 2.855 2.589 3.605 3.353 5 4.212 3.791 2.991 3.785 4.917 4.355 4.111 3.326 3.605 7 5.582 4.868 4.564 4.160 6.210 4.968 4.487 3.837 8 5.335 6.802 5.759 5.328 4.772 4.031 6.145 5.650 5.019 10 7.360 4.192 Compute the following:
Given a the following set of cash flows, what is the payback period? CF0: -10,411 CF1: 3,442 CF2: 4,606 CF3: 9,711 CF4: 9,565 CF5: 1,138 Answer with two decimals.

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