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30. You are valuing an investment that will pay you nothing the first two years, $6,000...

30.

You are valuing an investment that will pay you nothing the first two years, $6,000 the third year, $8,000 the fourth year, $12,000 the fifth year, and $18,000 (all payments are at the end of each year). What is the value of the investment to you now if the appropriate annual discount rate is 13.00%?

$44,000.13
$18,843.62
$24,223.70
$35,436.94
$48,980.94
business   finance   
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Answer #1

Calculate the present value of the amount as follows PVF @ 13% | PV of the amount 121 Year 122 123 124 125 126 127 128 Present value of the amount Amount 0.88495575 0.78314668 3 $6,000.00 0.69305016 4$8,000.00 0.61331873 5 $12,000.00 0.54275994 6 $18,000.00 0.48031853 $0.00 $0.00 $4,158.30 $4,906.55 $6,513.12 $8,645.73 $24,223.70 Therefore, the present value of the amount is $24,223.70 Formulas 121 Year 122 1 123 2 124 3 125 4 126 5 127 6 128 PV of the amount B122*C122 -B123 C123 -B124 C124 B125 *C125 -B126*C126 B127*C127 -SUM(D122:D127) Amount 6000 8000 12000 -18000 Present value of the amount PVF @ 13% -1/(1+13%)^A122 -1/(1+13%)*A123 -1/(1+13%)A124 -1/(1+13%)*A125 -1/(1+13%)A126 -1/(1+13%)M127

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