20 An investment paying $1000 in 1 year, $2000 in 2 years and $7000 in 3...

Question

Question

20 An investment paying $1000 in 1 year, $2000 in 2 years and $7000 in 3 years returning 10% p.a. has a present value of:

a. $8129.39

b. $6002.54

c. $7210.20

d. $7821.19

21. An investment paying $2000 in 2 year, $6000 in 4 years and $5000 in 12 years at an interest rate of 5% p.a. has a present

24. What is the expected return from an asset having the following possible returns and associated probabilities? Possible re

Answer 1

Answer #1

20. A B с D 2 Year Amount PV Factor Present Value 3 1 1000 0.9091 $ 909.09 4 2 2000 0.8264 $ 1,652.89 5 3 7000 0.7513 $ 5,259

Answer 2

Similar Homework Help Questions

Year Return at the end of the year $1000 $1000 $2000 $2000 14. You are planning...

Year Return at the end of the year $1000 $1000 $2000 $2000 14. You are planning on investing in a project which will last 4 years. You will invest $5,000 at a rate of 4%. Calculate the Net Present Value (NPV) of the project. You expect the project to return the following: (12 points) Year . . Return at the end of the year $1000 $1000 4 S2000 Year Present Value Cash indd Flow -5000 $1000 $1000 $2000 $2000 -5000...
9) Investment A: Year: 0 Cash flow: $14,000 1 2 3 $6000 $6000 $6000 4 $6000...

9) Investment A: Year: 0 Cash flow: $14,000 1 2 3 $6000 $6000 $6000 4 $6000 5 $6000 Investment B: Year: 0 Cash flow: $15,000 1 2 3 4 5 $7000 $7000 $7000 $7000 $7000 Investment C: 0 Cash flow: $18,000 Year: 1 $12,000 2 $2000 3 $2000 4 $2000 5 $2000 The cash flows for three projects are shown above. The cost of capital is 9.5%. If an investor decided to take projects with a payback period two years...
An investment returns for the years were 4% for year 1, 3% for year 2, 7%...

An investment returns for the years were 4% for year 1, 3% for year 2, 7% for year 3, and -2% for year 4. What is the arithmetic mean and geometric mean of this investment’s returns? If the year 1, year 2, and year 3 returns have 30%, 20% and 50% probabilities of happening, what is the expected return of this investment for the three years What is the standard deviation for the investment’s returns in the first three years?

AB 22 000 26200 Investment salvage Value 4000 5000 Annual revenue 7000 9500 3 years u...

AB 22 000 26200 Investment salvage Value 4000 5000 Annual revenue 7000 9500 3 years u seful life į % 4 years 15% 15% * wich project would you recommend (select), AAB? a) use AW method b) use pW repeatability c) use FW co termuintet
Year Investment Cash Flow Unrecovered investment 1 56000 2000 2 6000 4000 3 8000 4 9000...

Year Investment Cash Flow Unrecovered investment 1 56000 2000 2 6000 4000 3 8000 4 9000 5 12000 6 10000 7 8000 8 6000 9 5000 10 5000 Please, can you show me the process to compute the Unrecovered interest, and the payback period? Please, would you like to break it down? I am really confused. thank you advance.
12. (10pts) Project 1 requires an investment of $10,000 at time 0 and an additional investment...

12. (10pts) Project 1 requires an investment of $10,000 at time 0 and an additional investment of $5000 at time 1. It returns $2000 at time 3 and $6000 at time 4, 5, and 6. Project 2 requires an investment of $6000 at time 0 and returns $3500 at time 1 and $5000 at an unknown time. The net present value of the two projects are equal when calculated using compound interest at 4%. Find the unknown time for the...

1.) An investment in manufacturing equipment yields the following cash flows for 8 years. At the...

1.) An investment in manufacturing equipment yields the following cash flows for 8 years. At the end of the 8th year the equipment can be sold for $15,000. Assuming an interest rate of 14% (compounded annually), how much would you be willing to invest in this manufacturing equipment? C=? I=2000 I=2000 I=2000 I=2000 I=1000 I=1000 I=1000 I=1000 L=$15,000 0 1 2 3 4 5 6 7 8 C: Cost, I: Income, L: Salvage Value 2.) Suppose that the nominal annual...
Consider an investment that returns $10,000 a year for 5 years. That is at the end...

Consider an investment that returns $10,000 a year for 5 years. That is at the end of each year, for five years, it pays $10,000. Assuming the alternative is an annual interest rate of 2%, what is the present value of this income stream?
1. What is the present value of a 10-year, $1000 bond paying $75 annually when current...

1. What is the present value of a 10-year, $1000 bond paying $75 annually when current interest rates are at 8.25%? 2. What is the present value of a 10-year, $1000 bond paying $75 annually when current interest rates are at 6.85%? 3. What is the present value of a 10-year, $1000 bond paying $75 annually when current interest rates are at 7.25%? 4. A ten year bond was issued 2 years ago for $1000 and paid $80 annually. If...

3. An investment has the following future cash flows: $1000 in year one; $2500 in year...

3. An investment has the following future cash flows: $1000 in year one; $2500 in year two; $3000 in year three; and $2000 in year four. If the discount rate is 6% a year, what is the present value of this investment? How would your answer change if the discount rate was lower than 6%? Explain. 4. A company has a stock price of $53. Investors require a return of 12% a year. The company plans to pay a dividend...