Corporate Finance (4th Edition) (Pearson Series in Finance) - Standalone book
Corporate Finance (4th Edition) (Pearson Series in Finance) - Standalone book
4th Edition
ISBN: 9780134083278
Author: Jonathan Berk, Peter DeMarzo
Publisher: PEARSON
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Chapter 3, Problem 6P

Suppose the risk-free interest rate is 4%.

  1. a. Having $200 today is equivalent to having what amount in one year?
  2. b. Having $200 in one year is equivalent to having what amount today?
  3. c. Which would you prefer, $200 today or $200 in one year? Does your answer depend on when you need the money? Why or why not?
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Suppose the​ risk-free interest rate is 4.6%. Having $600 today is equivalent to having what amount in one​ year? ​(Round to the nearest​cent.) Having $600 in one year is equivalent to having what amount​ today? ​(Round to the nearest​cent.) Which would you​ prefer, $600 today or $600 in one​ year? Does your answer depend on when you need the​ money? Why or why​ not? ​(Round to the nearest​cent.)
Suppose the interest rate is 4.4%. a. Having $550 today is equivalent to having what amount in one year? b. Having $550 in one year is equivalent to having what amount today? c. Which would you prefer, $550 today or $550 in one year? Does your answer depend on when you need the money? Why or why not? a. Having $550 today is equivalent to having what amount in one year? It is equivalent to $. (Round to the nearest cent.)
Suppose someone offers to pay you $1,000 in one year. Which of the following is/are correct? Select all that apply. O If inflation goes up, the present value of that $1,000 would go down. O If your time preference goes up (i.e., you become more impatient), the present value of that $1,000 for you would go down. If interest rates go up, the present value of that $1,000 would also go up. O If uncertainty in the economy goes up, the present value of that $1,000 would also go up.

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Corporate Finance (4th Edition) (Pearson Series in Finance) - Standalone book

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