Q5: For an annual benefit of $50,000, how many years does it take for this value to drop below $500 (1%) in present worth, given a discount rate of 10%? Repeat for 1% and 5% and 20%. Plot each curve (on the same graph) with annual benefit on the y-axis and time (years, 1-50) on the x-axis.
Q5: For an annual benefit of $50,000, how many years does it take for this value to drop below $500 (1%) in present worth, given a discount rate of 10%? Repeat for 1% and 5% and 20%. Plot each curve (on the same graph) with annual benefit on the y-axis and time (years, 1-50) on the x-axis.
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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![Q5: For an annual benefit of $50,000, how many years does it take for this value to drop
below $500 (1%) in present worth, given a discount rate of 10%? Repeat for 1% and 5%
and 20%. Plot each curve (on the same graph) with annual benefit on the y-axis and time
(years, 1-50) on the x-axis.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F13489f85-dd27-4f53-89ab-cc4ffe6ee42e%2F8ac48e5b-66eb-475b-a100-9c4c37062c92%2F0wnste.png&w=3840&q=75)
Transcribed Image Text:Q5: For an annual benefit of $50,000, how many years does it take for this value to drop
below $500 (1%) in present worth, given a discount rate of 10%? Repeat for 1% and 5%
and 20%. Plot each curve (on the same graph) with annual benefit on the y-axis and time
(years, 1-50) on the x-axis.
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