an uneven stream of payments) You are given three investment alternatives to ana

Question

an uneven stream of payments) You are given three investment alternatives to analyze. The cash flows from these three investments are shown in the popup window:Assuming a discount rate of 16 percent, find the present value of each invest ment. a. What is the present value of investment A at 16 percent annual discount rate? (Round to the nearest cent.) Data Table INVESTMENT END OF YEAR $11,000 1,000 11,000 11,000 11,000 $11,000 $11,000 11,000 11,000 11,000 11,000 11,000 55,000 Enter your answer in the answer box and then click Check Answer 11,000 10

Explanation / Answer

Formula:
=NPV(0.16,J8:J17) where J8 to j17 are the cash flows for all three types.

Year A B C 1 $ 11,000.00 $                -   $ 11,000.00 2 $ 11,000.00 $                -   $                -   3 $ 11,000.00 $                -   $                -   4 $ 11,000.00 $                -   $                -   5 $ 11,000.00 $ 11,000.00 $                -   6 $                -   $ 11,000.00 $ 55,000.00 7 $                -   $ 11,000.00 $                -   8 $                -   $ 11,000.00 $                -   9 $                -   $ 11,000.00 $                -   10 $                -   $ 11,000.00 $ 11,000.00 PV $ 36,017.23 $ 22,385.52 $ 34,550.60

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