(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 1 2 3 A B C $10,000 $10,000 10,000 10,000 10,000 10,000 $10,000 10,000 50,000 10,000 10,000 10,000

(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 these three investments are as follows: Investment Alternatives End of Year 1 2 3 A B C $10,000 $10,000 10,000 10,000 10,000 10,000 $10,000 10,000 50,000 10,000 10,000 10,000

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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(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 1 2 3 4 5 6 7 8 9 10 A $10,000 10,000 10,000 10,000 10,000 Investment Alternatives B $10,000 10,000 10,000 10,000 C $10,000 50,000 10,000 10,000 (Click on the icon in order to copy its contents into a spreadsheet.) Assuming an annual discount rate of 23 percent, find the present value of each investment. 10.000
(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 1 2 4677AWN 3 5 8 A $10,000 10,000 10,000 10,000 10,000 B $10,000 10,000 10,000 10,000 C $10,000 50,000 a. What is the present value of investment A at an annual discount rate of 21 percent? (Round to the nearest cent.) b. What is the present value of investment B at an annual discount rate of 21 percent? (Round to the nearest cent.) C. What is the present value of investment C at an annual discount rate of 21 percent? (Round to the nearest cent.)
elated 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 1 2 3 4 5 6 7 8 9 A $12,000 12,000 12,000 12,000 12,000 $12,000 12,000 12,000 12,000 12.000 C $ 12,000 60,000 a. What is the present value of investment A at an annual discount rate of 22 percent? $36271.36 (Round to the nearest cent.) b. What is the present value of investment B at an annual discount rate of 22 percent? (Round to the nearest cent.) c. What is the present value of investment C at an annual discount rate of 22 percent? (Round to the nearest cent.)
(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 1 $ 18,000 $ 18,000 2 18,000 3 18,000 4 18,000 5 18,000 $ 18,000 6 18,000 90,000 7 18,000 8 18,000 9 18,000 10 18,000 18,000 (Click on the icon in order to copy its contents into a spreadsheet.) Assuming an annual discount rate of 23 percent, find the present value of each investment. Question content area bottom Part 1 a. What is the present value of investment A at an annual discount rate of 23 percent? $ enter your response here (Round to the…
You are given three investment alternatives to analyze. The cash flows from these three investments are as follows: Investment End of Year A B C 1 $ 11,000 $ 16,000 2 11,000 3 11,000 4 11,000 5 11,000 $ 11,000 6 11,000 48,000 7 11,000 8 11,000 9 11,000 10 11,000 16,000 (Click on the icon in order to copy its contents into a spreadsheet.) Assuming an annual discount rate of 15 percent, find the present value of each investment. Question content area bottom Part 1 a. What is the present value of investment A at an annual discount rate of 15 percent? $ enter your response here (Round to the nearest cent.)
(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 1 NO456TO 2 3 7 8 S A $13,000 13,000 13,000 13,000 13,000 Investment B S $13,000 13,000 13,000 13,000 (Round to the nearest cent.) C a. What is the present value of investment A at an annual discount rate of 25 percent? $37227.32 (Round to the nearest cent.) $18.000 b. What is the present value of investment B at an annual discount rate of 25 percent? 54.000 c. What is the present value of investment C at an annual discount rate of 25 percent? (Round to the nearest cent.)
(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 1 2 567356 4 8 A $13,000 13,000 13,000 13,000 13.000 Investment B $13,000 13,000 13,000 13,000 C $18,000 54,000 a. What is the present value of investment A at an annual discount rate of 22 percent? $ 37227.32 (Round to the nearest cent.) b. What is the present value of investment B at an annual discount rate of 22 percent? (Round to the nearest cent.)
Calculate the EAR of the following investment, entered as a percentage (Example: if your answer is 0.145, enter 14.5) Year Number Cashflow 0 -11400 1 3500 2 3000 3 3100 4 2800 Your Answer:
(Present value of an uneven stream of payments) You are given three investment alternatives to analyze. The cash flows from these three investments are as follows: End of Year 1 2 3 A $ 2,000 3,000 4 5 Investment B $1,000 1,000 4,000 1,000 (5,000) 1,000 5,000 5,000 (Click on the icon in order to copy its contents into a spreadsheet.) What is the present value of each of these three investments if the appropriate discount rate is 11 percent? с $ 4,000 4,000 (4,000) (4,000) 14,000 a. What is the present value of investment A at an annual discount rate of 11 percent? (Round to the nearest cent.)
16. You are considering an investment with the following cash flows: Year Cash Flow 0 -$50,000 1 $ 7,000 2 $ 4,000 3 $9,000 4 $61,000 What is the internal rate of return (IRR) for this investment? SHOW WORK
Fransico Ltd. is trying to determine which of three projects it wants to invest in. All three projects have been analyzed into Net Present Value amounts. (Round your answers to two decimal places when needed and use rounded answers for all future calculations). 1. Calculate the Net Present Value based on the following information: Cash Flows Project 2 Project 6 Project 12 Present Value of net cash inflows $491,900 $778,300 $503,700 Initial InvestmentSingle line $146,000Single line $407,400Single line $206,400Single line Single lineNet Present ValueDouble line Single lineDouble line Single lineDouble line Single lineDouble line 2. Calculate the Profitability Index for each of the projects. Round to two decimal places. Project Present value of net cash inflows / Initial Investment = Profitability Index 2 / = 6 / = 12 / = 3. Based on the Profitability Index, which project should be selected?
(Present value of an uneven stream of payments) You are given three investment alternatives to analyze. The cash flows from these three investments are as fo Investment End of Year C $ 2,000 $1,000 $4,000 2. 3,000 1,000 4,000 4,000 1,000 (4,000) (4,000) 14,000 4 (5,000) 1,000 5,000 (Click on the icon in order to copy its contents into a spreadsheet.) 4,000 What is the present value of each of these three investments if the appropriate discount rate is 14 percent? a. What is the present value of investment A at an annual discount rate of 14 percent? %24 (Round to the nearest cent.) %24

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