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Related to Checkpoint 6.6) (Present value of annuities and complex cash flows) You are given three investment alternatives to analyze. The cash flows from hese three investments are as follows: End of Year 1 2 3 4 5 6 7 8 A $ 18,000 18,000 18,000 18,000 18,000 Investment Alternatives B $18,000 18,000 18,000 18,000 C $18,000 90,000

Related to Checkpoint 6.6) (Present value of annuities and complex cash flows) You are given three investment alternatives to analyze. The cash flows from hese three investments are as follows: End of Year 1 2 3 4 5 6 7 8 A $ 18,000 18,000 18,000 18,000 18,000 Investment Alternatives B $18,000 18,000 18,000 18,000 C $18,000 90,000

Essentials Of Investments
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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H6.

 

(Related to Checkpoint 6.6) (Present value of annuities and complex cash flows) You are given three investment alternatives to analyze. The cash flows from these three investments are as follows: End of Year 12345678 A $ 18,000 18,000 18,000 18,000 18,000 Investment Alternatives B $18,000 18,000 18,000 18,000 с $ 18,000 90,000 a. What is the present value of investment A at an annual discount rate of 24 percent? $49416.91 (Round to the nearest cent.) b. What is the present value of investment B at an annual discount rate of 24 percent? (Round to the nearest cent.)
Transcribed Image Text:(Related to Checkpoint 6.6) (Present value of annuities and complex cash flows) You are given three investment alternatives to analyze. The cash flows from these three investments are as follows: End of Year 12345678 A $ 18,000 18,000 18,000 18,000 18,000 Investment Alternatives B $18,000 18,000 18,000 18,000 с $ 18,000 90,000 a. What is the present value of investment A at an annual discount rate of 24 percent? $49416.91 (Round to the nearest cent.) b. What is the present value of investment B at an annual discount rate of 24 percent? (Round to the nearest cent.)
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