ques 18 (Related to Checkpoint 5.4) (Present-value comparison) You are offered $110,000 today or $300,000 in 11 years. Assuming that you can earn 11 percent on your money, which should you choose?If you are offered $300,000 in 11 years and you can earn 11 percent on your money, what is the present value of $300,000?$ (Round to the nearest cent.)Which offer should you choose? (Select the best choice below.)OA. Choose $300,000 in 11 years because its present value is higher.OB. Choose $110,000 today because its present value is higher.

(a) The present value refers to the value of a future value with respect to a certain year and…

Answered: (Related to Checkpoint 5.4)…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 11EB: How much would you invest today in order to receive $30,000 in each of the following (for further...

See similar textbooks

Similar questions

(Related to Checkpoint 5.4) (Present-value comparison) You are offered $100,000 today or $300,000 in 13 years. Assuming that you can earn 11 percent on your money, which should you choose? If you are offered $300,000 in 13 years and you can earn 11 percent on your money, what is the present value of $300,000? $ (Round to the nearest cent.)
(Related to Checkpoint 5.4) (Present-value comparison) You are offered $110,000 today or $400,000 in 14 years. Assuming that you can earn 11 percent on your money, which should you choose? If you are offered $400,000 in 14 years and you can earn 11 percent on your money, what is the present value of $400,000? $92797.9392797.93 (Round to the nearest cent.) Which offer should you choose? (Select the best choice below.) A. Choose $110,000 today because its present value is higher. B. Choose $400,000 in 14 years because its present value is higher.
You are offered $100,000 today or $300,000 in 13 years. Assuming that you can earn 11 percent on your money, which should you choose? If you are offered $300,000 in 13 years and you can earn 11 percent on your money, what is the present value of $300,000? $ ___________(Round to the nearest cent.)
(Related to Checkpoint 5.6) (Solving for i) If you were offered $3,828.00 15 years from now in return for an investment of $800 currently, what annual rate of interest would you earn if you took the offer? The annual rate of interest you would earn if you took the offer is %. (Round to the nearest whole percent.)
An example of how to calculate net present value is done using the following. Imagine you have been given an investment opportunity wherein if you invest $1,200 today, you will receive $650 dollars at the end of each year for the next 5 years. You could separately choose to invest your money at 10% interest each year. Should you take the investment opportunity? To find the answer, use the NPV formula:
You can choose to take $105,000 in 11 years or $47,000 today. At an interest rate of 9 percent, what is the value of $105,000 now? (Enter your answer as a positive number rounded to 2 decimal places.) a-2. Which option should be selected? $105,000 in 11 years O $47,000 today b-1. Assume an interest rate of 9 percent for 8 years. If the choice is $105,000 in 8 years or $47,000 today, how much is the $105,000 worth today? (Enter your answer as a positive number rounded to 2 decimal places.) b-2. Which option should be selected now? $105,000 in 8 years O $47,000 today
Use future or present value techniques to solve the following problems. Starting with $13,000, how much will you have in 12 years if you can earn 15 percent on your money? Round the answer to the nearest cent. Round FV-factor to three decimal places. Calculate your answer based on the FV-factor. $ Calculate your answer based on the financial calculator. $ If you can earn only 12 percent? Round the answer to the nearest cent. Round FV-factor to three decimal places. Calculate your answer based on the FV-factor. $ Calculate your answer based on the financial calculator. $ If you inherited $20,000 today and invested all of it in a security that paid a 10 percent rate of return, how much would you have in 20 years? Round the answer to the nearest cent. Round FV-factor to three decimal places. Calculate your answer based on the FV-factor. $ Calculate your answer based on the financial calculator. $ If the average new home costs $240,000 today, how…
Calculating present and future values Use future or present value techniques to solve the following problems. Starting with $20,000, how much will you have in 12 years if you can earn 12 percent on your money? Round the answer to the nearest cent. Round FV-factor to three decimal places. Calculate your answer based on the FV-factor. $ Calculate your answer based on the financial calculator. $ If you can earn only 6 percent? Round the answer to the nearest cent. Round FV-factor to three decimal places. Calculate your answer based on the FV-factor. $ Calculate your answer based on the financial calculator. $ If you inherited $40,000 today and invested all of it in a security that paid a 9 percent rate of return, how much would you have in 25 years? Round the answer to the nearest cent. Round FV-factor to three decimal places. Calculate your answer based on the FV-factor. $ Calculate your answer based on the financial calculator. $ If the average…
Your uncle offers you a choice of $106,000 in 10 years or $43,000 today. Use Appendix B as an approximate answer, but calculate your final answer using the formula and financial calculator methods. a-1. If money is discounted at 9 percent, what is the present value of the $106,000? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Present value a-2. Which offer should you choose? $106,000 after 10 years O $43,000 today
You are offered $80,000 today or $400,000 in 10 years. Assuming that you can earn 16 percent on your money, which should you choose? Question content area bottom Part 1 If you are offered $400,000 in 10 years and you can earn 16 percent on your money, what is the present value of $400,000? $enter your response here (Round to the nearest cent.)
(Present-value comparison) You are offered $100,000 today or $340,000 in 15 years. Assuming that you can earn 14 percent on your money, which should you choose?
You are thinking about purchasing an investment from Get-Rich-Quick Investmemnt company. If you buy the investment, you will receive $50 every month for five(5)years. Payment will be made at the end of each month. If your required rate of return is 9% how much should you be willing to pay for this investment? Group of answer choices $4,632.87 $2,735.25 $2,525.10 $2,408.67

SEE MORE QUESTIONS

Recommended textbooks for you

Principles of Accounting Volume 2

Accounting

ISBN:

9781947172609

Author:

OpenStax

Publisher:

OpenStax College

Principles of Accounting Volume 2

Accounting

ISBN:

9781947172609

Author:

OpenStax

Publisher:

OpenStax College

SEE MORE TEXTBOOKS