Present value (with changing interest rates). Marty has been offered an injury settlement of $15,000 payable in 5 years. He wants to know what the present value of the injury settlement is if his opportunity cost is 5%. (The opportunity cost is the interest rate in this problem.) What if the opportunity cost is 8%? What if it is 11.5%?
Present value (with changing interest rates). Marty has been offered an injury settlement of $15,000 payable in 5 years. He wants to know what the present value of the injury settlement is if his opportunity cost is 5%. (The opportunity cost is the interest rate in this problem.) What if the opportunity cost is 8%? What if it is 11.5%?
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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(The opportunity cost is the interest rate in this problem.) What if the opportunity cost is
8%?
What if it is
11.5%?
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