Using the tables provided, if an investment is made now for $19,200 that will generate a cash inflow of $6,400 a year for the nex: 4 years, the net present value (rounded to the nearest dollar) of the investment, assuming an earnings rate of 10%, is
Using the tables provided, if an investment is made now for $19,200 that will generate a cash inflow of $6,400 a year for the nex: 4 years, the net present value (rounded to the nearest dollar) of the investment, assuming an earnings rate of 10%, is
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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![Following is a table for the present value of $1 at compound interest:
Year
6%
10%
12%
1
0.943
0.909
0.893
2
0.890
0.826
0.797
3
0.840
0.751
0.712
4
0.792
0.683
0.636
5
0.747
0.621
0.567
Following is a table for the present value of an annuity of $1 at compound interest:
Year
6%
10%
12%
1
0.943
0.909
0.893
2
1.833
1.736
1.690
3
2.673
2.487
2.402
4
3.465
3.170
3.037
5
4.212
3.791
3.605
Using the tables provided, if an investment is made now for $19,200 that will generate a cash inflow of $6,400 a year for the next
4 years, the net present value (rounded to the nearest dollar) of the investment, assuming an earnings rate of 10%, is
a. $6,400
Ob. $20,288
Oc. $19,200
Od. $1,088](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F50c4a886-3e07-4312-95fc-3240a8ded880%2F146c51d8-1d24-4359-8674-6a6036ff0c88%2F4tdj2ta_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Following is a table for the present value of $1 at compound interest:
Year
6%
10%
12%
1
0.943
0.909
0.893
2
0.890
0.826
0.797
3
0.840
0.751
0.712
4
0.792
0.683
0.636
5
0.747
0.621
0.567
Following is a table for the present value of an annuity of $1 at compound interest:
Year
6%
10%
12%
1
0.943
0.909
0.893
2
1.833
1.736
1.690
3
2.673
2.487
2.402
4
3.465
3.170
3.037
5
4.212
3.791
3.605
Using the tables provided, if an investment is made now for $19,200 that will generate a cash inflow of $6,400 a year for the next
4 years, the net present value (rounded to the nearest dollar) of the investment, assuming an earnings rate of 10%, is
a. $6,400
Ob. $20,288
Oc. $19,200
Od. $1,088
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