Julie has just retired. Her company's retirement program has two options as to how retirement benefits can be received. Under thefirst option, Julie would receive a lump sum of $134,000 immediately as her full retirement benefit. Under the second option, shewould receive $28,000 each year for 5 years plus a lump-sum payment of $53,000 at the end of the 5-year period.Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables.Required:1-a. Calculate the present value for the following assuming that the money can be invested at 12%.1-b. If she can invest money at 12%, which option would you recommend that she accept?Answer is not complete.Complete this question by entering your answers in the tabs below.Req 1AReq 1BCalculate the present value for the following assuming that the money can be invested at 12%. (Round your final answer tothe nearest whole dollar amount.)Option 1Option 2Present valueReq 1B >134,000< Req 1A

Time value of money (TVM) refers to the method used to measure the amount of money at different…

Answered: Required: 1-a. Calculate the present…

Required: 1-a. Calculate the present value for the following assuming that the money can be invested at 12%. 1-b. If she can invest money at 12%, which option would you recommend that she accept?

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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Find the total value TV of the given income stream and also find its future value FV (at the end of the given interval) using the given interest rate. HINT [See Examples 4, 5.] (Round your answers to the nearest cent.) R(t) = 50,000, 0 < t < 5, at 10% TV - $189539.34 FV = $305255 Submit Answer X × 12
You have calculated the value of an investment to be $100. If it costs $105, you should buy it. Select one: True False
Please answer the question. The details of the question are attached in the image below.
5. Solve the following two independent scenarios: A. How much must be invested now to receive $30,000 for 10 years if the first $30,000 is received one year from now and the rate is 8%? Future Value PV FV Tables Factor Present Value ? ? ? PLEASE NOTE: All FV Factors will be rounded to three decimal places (i.e. 1.234). All dollar amounts will be with "$" and commas as needed and rounded to whole dollars (i.e. $12,345). Using the appropriate EXCEL spreadsheet, the answer = ? PLEASE NOTE: The dollar amount will be with "$" and commas as needed and rounded to two decimal places (i.e. $12,345.67). B. Project A costs $5,000 and will generate annual after-tax net cash inflows of $1,800 for five years. What is the NPV using 8% as the discount rate? Future Value PV FV Tables Factor Net Present Value ? ? ? PLEASE NOTE: All FV Factors will be rounded to three decimal places (i.e. 1.234). All dollar amounts will be with "$" and commas as needed and rounded to whole dollars (i.e.…
15
K You have been offered a unique investment opportunity. If you invest $11,300 today, you will receive $565 one year from now, $1,695 two years from now, and $11,300 ten years from now. a. What is the NPV of the opportunity if the cost of capital is 5.7% per year? Should you take the opportunity? b. What is the NPV of the opportunity if the cost of capital is 1.7% per year? Should you take it now? a. What is the NPV of the opportunity if the cost of capital is 5,7% per year? If the cost of capital is 5.7% per year, the NPV is $. (Round to the nearest cent.)
Determine the present value P you must invest to have the future value A at simple interest rate r after time t. A = $19,000, r = 11.5%, t = 4 years The present value that must be invested to get $19,000 after 4 years at an interest rate of 11.5% is $. (Round up to the nearest cent.)
= 6. Assume the annual effective interest rate is i capital of £100,000 and is contemplating two projects: 2%. An individual wants to invest a Project A. She buys a property for exactly £100,000 at time t income from rent. (a) If rent is paid monthly in advance and each payment is £700, how long will it take before the present value of rental payments exceeds the initial cost of purchasing the property? 10 that will generate (b) To be mo realistic assume that rent increases every three years at a rate of 1% effective per annum compound, and taxes are paid at 20% on rental income. Moreover, maintenance work for the property will cost £1,500 to be paid at the end of every 5 years (and these are not subject to tax relief). If rental payments stop after 15 years, what is the net present value (at time t = 0) of all cash flows for 15 years? (Include maintenance costs paid at t = 15 years.)
Can I have an answer and solution for this one, please?
Investment A has a future value of $600. Investment B has a future value of $500. Both have the same present value. All else equal, which one has the higher interest rate? Select one: a. B b. A c. A=B Clear my choice
Suppose an investor, Erik, is offered the investment opportunities described in the table below. Each investment costs $1,000 today and provides a payoff, also described below, one year from now. Option Payoff One Year from Now 1 100% chance of receiving $1,100 2 50% chance of receiving $1,000 50% chance of receiving $1,200 3 50% chance of receiving $200 50% chance of receiving $2,000 If Erik is risk averse, which investment will he prefer? The investor will choose option 1. The investor will choose option 2. The investor will choose option 3. The investor will be indifferent toward these options. In contrast to his brother Erik, Devin is a risk lover (or exhibits risk seeking behavior). Which of the following statements is true about Devin? Everything else remaining constant, Devin will prefer option 3. Everything else remaining constant, Devin will prefer option 2. Everything else remaining constant,…
An investment offers the following: a series of $1000 annual payments, starting one year from now, for a total of 12 payments. If your opportunity cost (as an EAR) is 5%, what is the investment worth to you today? Group of answer choices $11,079.20 $9,214.56 $10,103.26 $8,863.25 $10,241.19 Give typing answer with explanation and conclusion

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