Suppose that you have the opportunity to receive $24,000 per year for the next 6 years. Over this time period, the APR is 7% per year. Interest is compounded on a monthly basis. How much are you willing to pay for this investment today? Round your answer to the nearest dollar. a. PVA = $113,739 b. PVA = $118,309 c. PVA = $117,309 d. PVA = $118,903 %3D || ||

Suppose that you have the opportunity to receive $24,000 per year for the next 6 years. Over this time period, the APR is 7% per year. Interest is compounded on a monthly basis. How much are you willing to pay for this investment today? Round your answer to the nearest dollar. a. PVA = $113,739 b. PVA = $118,309 c. PVA = $117,309 d. PVA = $118,903 %3D || ||

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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Your company plans to invest $20,000 at the end of each year or years 1 through 5, The company will increase the investment by $5,000 in year 6 and an additional $5,000 in year 7. What is the present value af these investments if the interest rate is 10% per year compounded annually? _______
An investment pays $2,500 per year for the first 4 years, $5,000 per year for the next 3 years, and $7,500 per year the following 9 years (all payments are at the end of each year). If the discount rate is 11.85% compounding quarterly, what is the fair price of this investment?Work with 4 decimal places and round your answer to two decimal places. For example, if your answer is $345.667 round as 345.67 and if your answer is .05718 or 5.718% round as 5.72.
Whichoption is better: receive $160,000 now or $50,000, $25,000, $55,000, $30,000, and $40,000,respectively, over the next five years? The cash flows are at the end of each year except for$160,000.Requirements1. Assuming a 6% interest rate, which investment opportunity would you choose?2. If you could earn 10%, would your choice change?3. Assuming a 10% interest rate, what would the cash flow in year 5 have to be in order foryou to be indifferent to the two plans?
How much will $7,500 invested at the end of each year grow to in six years, assuming an interest rate of 10% compounded annually? Note: Use tables, Excel, or a financial calculator. Round your final answer to the nearest whole dollar. (FV of $1, PV of $1, FVA of $1, and RVA of $1) Multiple Choice $57,867 $39,860 $98,856
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