please find the present value of investments A, B, and C. Score: 0 of 5 pts 12 o
ID: 2615137 • Letter: P
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please find the present value of investments A, B, and C.
Score: 0 of 5 pts 12 of 12 (12 complete) ? P6-50 (similar to) (Present value of an uneven stream of payments) You are given three investment alternatives to analyze. The cash flows from these three investments are as follows Investment End of S 2,000 3,000 4,000 (5,000) 5,000 $1,000 1,000 1,000 1,000 3,000 S 6,000 6,000 (6,000) (6,000) 16,000 What is the present value of each of these three investments if the appropriate discount rate is 11 percent? a. What is the present value of investment A at an annual discount rate of 11 percent? (Round to the nearest cent) Enter your answer in the answer box and then click Check Answer Clear All O Type here to searchExplanation / Answer
CALCULATION OF THE PRESENT VALUE OF THE INVESTMENT A End of the year Investment A Present Value @ 11% Present Value 1 $ 2,000 0.9009 $ 1,801.80 2 $ 3,000 0.8116 $ 2,434.87 3 $ 4,000 0.7312 $ 2,924.77 4 $ -5,000 0.6587 $ -3,293.65 5 $ 5,000 0.5935 $ 2,967.26 Total Present Value $ 6,835.04 CALCULATION OF THE PRESENT VALUE OF THE INVESTMENT B End of the year Investment B Present Value @ 11% Present Value 1 $ 1,000 0.9009 $ 900.90 2 $ 1,000 0.8116 $ 811.62 3 $ 1,000 0.7312 $ 731.19 4 $ 1,000 0.6587 $ 658.73 5 $ 3,000 0.5935 $ 1,780.35 Total Present Value $ 4,882.80 CALCULATION OF THE PRESENT VALUE OF THE INVESTMENT C End of the year Investment C Present Value @ 11% Present Value 1 $ 6,000 0.9009 $ 5,405.41 2 $ 6,000 0.8116 $ 4,869.73 3 $ -6,000 0.7312 $ -4,387.15 4 $ -6,000 0.6587 $ -3,952.39 5 $ 16,000 0.5935 $ 9,495.22 Total Present Value $ 11,430.83
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