You are offered a chance to buy an asset for $4,500 that is expected to produce

Question

You are offered a chance to buy an asset for $4,500 that is expected to produce cash flows of $750 at the end of Year 1, $1,000 at the end of Year 2, $850 at the end of Year 3, and $4,250 at Your answer should be between 5.08 and 22.48, rounded to 2 decimal places, with no special characters. D Question 16 What's the present value of $11,500 discounted back 5 years if the appropriate interest rate is 5.5%, compounded semiannually? Your answer should be between 8032.00 and 9554.00, rounded to 2 decimal places with no special characters 0

Explanation / Answer

As per Chegg policy only 1 question per submission can be solved. Here comes the solution for first question 12.00% 15% NPV@ 0.12 NPV@ 0.15 Year Cash flow PV factor PV-Cash flow PV factor PV-Cash flow 0 (4,500.00) 1.000      (4,500) 1.000      (4,500) 1       750.00 0.893           670 0.870           652 2    1,000.00 0.797           797 0.756           756 3       850.00 0.712           605 0.658           559 4    4,250.00 0.636        2,701 0.572        2,430 NPV           273 Total PV          (103) IRR =Lower rate + Difference in rates*(NPV at lower rate)/(Lower rate NPV-Higher rate NPV) =12%+ (15%-12%)*(273/(273+103) 14.18%

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