(Present value of an uneven stream of payments) You are given three investment alternatives to analyze. The cash flows from these three investments are as follows: End of Year A $ 2,000 3,000 C Investment B 1 $1,000 $ 4,000 2 1,000 4,000 3 1,000 (4,000) 4 5 (5,000) 5,000 1,000 (4,000) 4,000 14,000 (Click on the icon in order to copy its contents into a spreadsheet.) 4,000 What is the present value of each of these three investments if the appropriate discount rate is 12 percent?
(Present value of an uneven stream of payments) You are given three investment alternatives to analyze. The cash flows from these three investments are as follows: End of Year A $ 2,000 3,000 C Investment B 1 $1,000 $ 4,000 2 1,000 4,000 3 1,000 (4,000) 4 5 (5,000) 5,000 1,000 (4,000) 4,000 14,000 (Click on the icon in order to copy its contents into a spreadsheet.) 4,000 What is the present value of each of these three investments if the appropriate discount rate is 12 percent?
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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question 12
What is the present value of investment A, B, and C at an annual discount rate of 12 percent?
Transcribed Image Text:(Present value of an uneven stream of payments) You are given three investment alternatives to analyze. The cash flows from these three investments are as follows:
End of Year
A
$ 2,000
3,000
C
Investment
B
1
$1,000
$ 4,000
2
1,000
4,000
3
1,000
(4,000)
4
5
(5,000)
5,000
1,000
(4,000)
4,000
14,000
(Click on the icon
in order to copy its contents into a spreadsheet.)
4,000
What is the present value of each of these three investments if the appropriate discount rate is 12 percent?
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