Test: Multiple Chapter Test Chapters 4-5 graded Tine Remaning 0-1254 00:42:54 Su

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Test: Multiple Chapter Test Chapters 4-5 graded Tine Remaning 0-1254 00:42:54 Submit Test This Question: 4 pts 17?128 (17 complete) ? This Test: 100 pts possible Present value of an uneven stream of payments) You are given three inwestment alternatives to analyze. The cash flows from these three investments are shown in the popup window: EB Assuming a discount rate of 24 percent,find the present value of each investment a. What is the present value of investment A at 24 percent annual discount rate? (Round to the nearest cent) b. What is the present value of investment B at 24 percent annual discount rate? an: s? (Round to the nearest cent.) Data Table ou bil c. What is the present value of investment C at 24 percent annual discount rate? ?(Round to the nearest cent.) INVESTMENT END OF YEAR $19,000 19,000 19,000 19,000 19,000 $19,000 $19,000 19,000 19,000 19,000 19,000 19,000 95,000 nan tps entities 10 19,000 (Click on the icon located on the top-night comer of the data table above in order to copy its contents into a spreadsheet) Enter your answer in each of the answer boxes Print Done

Explanation / Answer

Present Value of Investment = Cash flows/ (1+ Annual Discount rate)^no of Years

End of Year A B C Present Value of A@24% Present Value of A@24% Present Value of A@24% 1 19000 19000 15322.58 15322.58 2 19000 12356.92 3 19000 9965.26 4 19000 8036.50 5 19000 19000 6481.05 6 19000 95000 5226.65 26133.25 7 19000 4215.04 8 19000 3399.23 9 19000 2741.31 10 19000 19000 2210.74 2210.74 Total 52162.30 17792.97 43666.57

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