9) | Present Value = Future value/ ((1+r)^t) | ||||||||
where r is the interest rate that is 7% and t is the time period in years that is 7. | |||||||||
Future value | 10000 | ||||||||
Present Value | 10000/((1.07)^7) | ||||||||
Present Value | 6227.497 | ||||||||
The present value is closest to | |||||||||
B) $6227. | |||||||||
12) | Present Value = Future value/ ((1+r)^t) | ||||||||
where r is the interest rate that is 15% and t is the time period in years. | |||||||||
Net present value (NPV) = initial investment + sum of present values of future cash flows. | |||||||||
Year | 0 | 1 | 2 | 3 | |||||
cash flow | -1500000 | 350000 | 450000 | 630000 | |||||
present value | 304347.8 | 340264.7 | 414235.2 | ||||||
NPV | -441152 | ||||||||
The NPV is -$441152. | |||||||||
The company should not invest in this opportunity since the NPV is negative. | |||||||||
D. |
Question 9 9. At an annual interest rate of 7%, the present value of $10000 received...
At an annual interest rate of 7%, the present value of $10000 received in seven years is closest to: A) $3565 B) $6227 C) $7015 D) $7035
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x Incorrect. What is the present value of $8,000 received in 7 years at 8% interest? (Round answer to O decimal places.) Present value x] Incorrect. Bonnie Lee buys a savings bond for $125. The bond pays 5% and matures in 10 years. What amount will Bonnie receive when she redeems the bond? (Round answer to 2 decimal places.) Future value x Incorrect. Erik Peterson needs to have $10,000 at the end of 5 years to purchase a second car....
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