(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: Investment Alternatives End of Year A B C 123456789 $11,000 $11,000 11,000 11,000 11,000 11,000 $11,000 11,000 55,000 11,000 11,000 11.000 a. What is the present value of investment A at an annual discount rate of 17 percent? (Round to the nearest cent.) b. What is the present value of investment B at an annual discount rate of 17 percent? (Round to the nearest cent.) c. What is the present value of investment C at an annual discount rate of 17 percent? (Round to the nearest cent.)

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
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UNIT 7-13

(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:
Investment Alternatives
End of Year
A
B
C
123456789
$11,000
$11,000
11,000
11,000
11,000
11,000
$11,000
11,000
55,000
11,000
11,000
11.000
a. What is the present value of investment A at an annual discount rate of 17 percent?
(Round to the nearest cent.)
b. What is the present value of investment B at an annual discount rate of 17 percent?
(Round to the nearest cent.)
c. What is the present value of investment C at an annual discount rate of 17 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: Investment Alternatives End of Year A B C 123456789 $11,000 $11,000 11,000 11,000 11,000 11,000 $11,000 11,000 55,000 11,000 11,000 11.000 a. What is the present value of investment A at an annual discount rate of 17 percent? (Round to the nearest cent.) b. What is the present value of investment B at an annual discount rate of 17 percent? (Round to the nearest cent.) c. What is the present value of investment C at an annual discount rate of 17 percent? (Round to the nearest cent.)
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