Question

QUESTION 7 Assume Rafael cam cam an 7 percent after-tax rate of retum. He can receive $2,000 today or $3,000 in five years. What is the present value of the 53,000 payment due in five years? QUESTIONS Assame Ellina carns a 9 percent after-tax rate of return, and that she owes a friend $2,400. She can pay the friend $2,400 today or 53,500 in four years. What is the present value of the 53,500 payment due in four years QUESTIONS Jonah has the choice of paying Rita $20,000 today $80,000 in en years. Assume Jonah can com a Il percent after-tax rate of tum, What is the present value of the $80,000 payment due in 10 QUESTION 10 Komike Tanaka invests S13,000 in Lymalean, Inc. Lyman does not pay any dividends. Komiko projects that her investment will generate all percent before tax rate of return. She plans to invest for the long term How much each will komikeretainers, he holds the investment for 5 years and then she sells it when the long-term capital gains rate is 15 percent QUESTION 11 Komik Tanaka invests $13.000 in Lymalean, Inc. lymBean does not pay any dividends Kombiko projects that her investment will generate all percent before tax rate of return. She plans to invest for the long term she holds the investment for 5 yas and then she wells it when the long-term capital gains rate is 15 cent, what is her after tax rate of return

Answer 1

Dear student, only one question is allowed at a time. I am answering the first question

7)

We have to calculate present value of $3,000 to be received in 5 years

Present value factor

= 1 / ( 1 + Rate of interest ) ^ Number of years

Where,

Rate of interest = 7% or 0.07

Number of years = 5

So, PV Factor

= 1 / ( 1 + 0.07 ) ^ 5

= 1.402552

= 0.712986

So, Present value

= Amount receivable x Present value factor

= $3,000 x 0.712986

= $ 2,138.96