1) If the discount rate is 9 percent, what is the present value of these cash fl

Question

1)

If the discount rate is 9 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

What is the present value at 17 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)

What is the present value at 25 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

$   

2)

What is the future value of $2,200 in 18 years assuming an interest rate of 7.5 percent compounded semiannually? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

3)

What is the future value of $2,200 in 18 years assuming an interest rate of 7.5 percent compounded semiannually? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

4)

You have just won the lottery and will receive $1,000,000 in one year. You will receive payments for 30 years and the payments will increase 2.8 percent per year.

If the appropriate discount rate is 6.8 percent, what is the present value of your winnings? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Explanation / Answer

Wainright Co. has identified an investment project with the following cash flows.

V@9% =$790 / 1.09 +$1,070 / 1.09^2 +$1,330 / 1.09^3 +$1,450 / 1.09^4 =$3679.58

V@17% =$790 / 1.17 +$1,070 / 1.17^2 +$1,330 / 1.17^3   +$1,450 / 1.17^4 =$3061.06

V@25% =$790 / 1.25 +$1,070 / 1.25^2 +$1,330 / 1.25^3   +$1,450 / 1.25^4 =$2591.68

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.