You have the choice of receiving $80,000 now or $30,000 now and another $56,000 two years from now. In terms of today's dollar, which choice is better and by how much? Money is worth 5.3% compounded annually Which choice is better? OA. The choice of $80,000 now is better OB. They are equal in value OC. The choice of $30,000 now and $56,000 in two years is better The better choice is greater than the alterative choice by $in terms of today's dollar. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)

You have the choice of receiving $80,000 now or $30,000 now and another $56,000 two years from now. In terms of today's dollar, which choice is better and by how much? Money is worth 5.3% compounded annually Which choice is better? OA. The choice of $80,000 now is better OB. They are equal in value OC. The choice of $30,000 now and $56,000 in two years is better The better choice is greater than the alterative choice by $in terms of today's dollar. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)

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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Similar questions

You are going to receive $220,000 in 50 years. What is the difference in present value between using a discount rate of 16 percent versus 4 percent? Use Appendix B as an approximate answer, but calculate your final answer using the formula and financial calculator methods. (Input your answer as a positive value. Do not round intermediate calculations. Round your final answer to 2 decimal places.) Difference in present value
You will receive $1000 two years from today, and at the end of each subsequent year, you will receive an additional $1000 compared to the previous year indefinitely. If the discount rate is 10% compounded annually, what is the present value today? Show the main steps in your calculation.
Suppose you need $1,000 in one year and $2,000 more in two years. If you can earn 9%, how much do you need to put up today?
9
Imagine you received two offers. You need to decide which one means more money for you! OFFER #1: Right away, you receive $2,470,000. Also, you will receive 40 back-to-back payments of $1,235,000 each, six months apart, and the first one of these will take place in one year. The discount rate is 8 percent, with daily compounding. OFFER #2: Right away, you receive $27 million. And nothing else in the future. To make your decision, you need to first figure out how much Offer #1 is worth to you in today's dollars. The answer is: $ (Assume thirty days in each month and twelve months in each year.) (Do not round intermediate calculations. Round your final answer to 2 decimal places, e.g., 12.34.) Present value
Suppose you wish to have RM1.5 million at the end of 25 years from now. You are considering two options of investment. Alternative A B Opportunity cost 12% p.a 10% p.a Discounted annually semi-annually a) Which one is the better option?
Investment X offers to pay you $4,700 per year for 9 years, whereas Investment Y offers to pay you $6,400 per year for 5 years. a. If the discount rate is 8 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. If the discount rate is 20 percent, what is the present value of these cash flows?
You just won the TVM Lottery. You will receive $1 million today plus another 10 annual payments that increase by $700, 000 per year. Thus, in one year you receive $1.70 million. In two years, you get $2.40 million, and so on. If the appropriate discount rate is 8.0 percent, what is the value of your winnings today? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e. g., 1,234,567.89.)
(Related to Checkpoint 5.4) (Present-value comparison) You are offered $100,000 today or $300,000 in 13 years. Assuming that you can earn 11 percent on your money, which should you choose? If you are offered $300,000 in 13 years and you can earn 11 percent on your money, what is the present value of $300,000? $ (Round to the nearest cent.)
You wish to have $100,000 in 15 years. How much should you set aside today if the discount rate is 14%? N = i = % years To answer this question, I should calculate: OFV OPMT OPV I should set aside today: $ Calculation details (recommended): (Include two decimal places)
One of two mutually exclusive alternatives must be selected. Alternative A costs $30,000 now for an annual benefit of $8450. Alternative B costs $50,000 now for an annual benefit of $14,000. Using a 15% nominal interest rate, compounded continuously, which do you recommend? Solve by annual cash flow analysis with 5 year lives.
You have the option to receive $5,000 one year from now or $4,500 today. If the discount rate is 10%, which option should you choose to maximize your present value? Receive $5,000 one year from now Receive $4,500 today

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