(Present value of a complex stream) Don Draper has signed a contract that will pay him $60,000 at the end of each year for the next 6 years, plus an additional $120,000 at the end of year 6. If 9 percent is the appropriate discount rate, what is the present value of this contract? The present value of the contract is $ (Round to the nearest cent.) C...

(Present value of a complex stream) Don Draper has signed a contract that will pay him $60,000 at the end of each year for the next 6 years, plus an additional $120,000 at the end of year 6. If 9 percent is the appropriate discount rate, what is the present value of this contract? The present value of the contract is $ (Round to the nearest cent.) C...

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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X-person has committed to a payment that needs to pay BD 80,000 every year at the end of each next eleven years. What will be the future amount of Ahmed if it were to instead settle the claim immediately with a single payment, with an interest rate of 6%?solve the problem showing cash flow, and final answer using a suitable formula.
2. Calculate the present value to purchase a lot of land if $18,000 is put down and $2,000 is paid per quarter for 3 years. Assume that there is 6% interest that is compounded quarterly if the cash price for the land is 825, 000, is it better to pay cash or finance the purchase? According to the Present Value of an Annuity Table, at 1.5% interest for 5 years, the factor is 17.16564 O $52,337,28, it is better to pay $25,000 cash 14.782.64 is better to finance the purchase $27, 565.28 at is better to pay $25,000 cash O822,782.64 it is better to finance the purchase "At (harger Canad
Answer the questions ASAP.
Keith Riggins expects an investment of $125,473.50 to return $15,000 annually for several years. If Riggins earns a return of 10%, how many annual payments will he receive? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round "Table Factor" to 4 decimal places.) Present Value Annuity Payment = ון Table Factor Annual Payments payments
Please help me answer Question 20. :(
(Present value of a perpetuity) At a discount rate of 13.00%, find the present value of a perpetual payment of $1,500 per year. If the discount rate were lowered to 6.50%, half the initial rate, what would be the value of the perpetuity? a. If the discount rate were 13.00%, the present value of the perpetuity is $ (Round to the nearest cent.) b. If the discount rate were lowered to 6.50%, half the initial rate, the present value of the perpetuity is $ (Round to the nearest cent.)
D. At a certain interest rate the present values of the following two payment patterns are equal: (i) P 200,000 at the end of 5 years plus P 500,000 at the end of 10 years; (ii) P 400,940 at the end of 5 years. At the same interest rate P100,000 invested now plus P 120,000 invested at the end of 5 years will accumulate to X at the end of 10 years. Calculate X.
Consider the following investment. (Round your answers to the nearest cent.) $5,200 at 7 3 4 % compounded quarterly for 8 1 2 years (a) Find the future value of the given amount.$ (b) Interpret the future value of the given amount. After 8 1 2 years, the investment is worth $ .
Qnl. A series of payments of 700 Riyals is made at the end of each quarter in an account for 5 years, where the nominal annual interest rate is 3.6%. Find ) the present value of the annuity, i.e. PV (t); (ii) the future value of the annuity ,i.e. FV(t,).
am. 113.
Calculate the future value of $7,000 in 3 years at an interest rate of 6% per year. (Round to the nearestdollar.) 6 years at an interest rate of 6% per year. (Round to the nearestdollar.) 3 years at an interest rate of 12% per year. (Round to the nearestdollar.) Why is the amount of interest earned in part (1) less than half the amount of interest earned in part (2)?(Round to the nearestdollar.)
Suppose that you have the opportunity to receive $24,000 per year for the next 6 years. Over this time period, the APR is 7% per year. Interest is compounded on a monthly basis. How much are you willing to pay for this investment today? Round your answer to the nearest dollar. a. PVA = $113,739 b. PVA = $118,309 c. PVA = $117,309 d. PVA = $118,903

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