You have come up with a forecast of your future earnings. You believe you will earn:...
You have come up with a forecast of your future earnings. You believe you will earn: $20,000 next year (one-year from now); $40,000 two years from now; $60,000 three years from now; and, $100,000 four years from now and every year there-after for another 29 years (30 such years in total) Assume your earnings in all of these years are received as one lump-sum payment at the end of every year. Assume your personal discount rate is 8%. What is the present value of your estimated future income?
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You have come up with a forecast of your future earnings. You
believe you will earn:...
When you retire 50 years from now, you want to have $2,000,000 million. You think you...
When you retire 50 years from now, you want to have $2,000,000 million. You think you can earn an average of 8 percent on your investments. To meet your goal, you are trying to decide whether to deposit a lump sum today, or to wait and deposit a lump sum 2 years from today. How much more will you have to deposit as a lump sum if you wait for 2 years before making the deposit? Group of answer choices...
You won the lottery and have a number of choices as to how to take the money. Which one of the following choices yields...
You won the lottery and have a number of choices as to how to take the money. Which one of the following choices yields the greatest present value? A. $12,000 a year at the end of each of the next 6 years using a 6% discount rate B. $53,500 (lump sum) now using a 6% discount rate C. $84,000 (lump sum) 7 years from now using a 6% discount rate D. $92,000 (lump sum) 7 years from now using an...
If you invest $10,000 today and earn a 20% annual internal rate of return (IRR) over...
If you invest $10,000 today and earn a 20% annual internal rate of return (IRR) over five years (with all of the proceeds received at the end of the fifth year), then the amount you will receive at the end of the fifth year is: How much would you pay today for an investment offering a lump sum of $100,000 in five years if you hoped to earn an annual rate of return of 25%? You invest $300,000 today and...
You are trying to decide how much to save for retirement. Assume you plan to save...
You are trying to decide how much to save for retirement. Assume you plan to save $5,000 per year with the first investment made one year from now. You think you can earn 5.0% per year on your investments and you plan to retire in 27 years, immediately after making your last S5,000 investment. a. How much will you have in your retirement account on the day you retire? b. If, instead of investing S5,000 per year, you wanted to...
You have won the lottery and your prize is $1,000,000. Since the parentheses on said that...
You have won the lottery and your prize is $1,000,000. Since the parentheses on said that the winner had the option of taking a lump sum or an annuity you have to decide the best deal for you. Your choices are: 1) $1,000,000 in 10 years, present Valve 2) 10 annual payments of $100,000 which begin in one year, Nesen vowe Or, 3) a lump sum of $675,000. You figure you could earn 8% on your money. Ignoring taxes, which...
You have won the lottery and your prize is $1.000.000. Since the parentheses said that the...
You have won the lottery and your prize is $1.000.000. Since the parentheses said that the winner had the option of taking a lump sum or an annuity you have to decide me best deal for you. Your choices are: 1) $1,000,000 in 10 years, present Valve 2) 10 annual payments of $100,000 which begin in one year, Mesen Vowe Or, 3) a lump sum of $675,000. You figure you could earn 8% on your money. Ignoring taxes, which is...
Your younger sister has come to you for career advice as she is about to enter...
Your younger sister has come to you for career advice as she is about to enter university, and there are two options open for her. Her first option is to study engineering. If she does this, here undergraduate degree would cost her $15,000 per year for four years. Having obtained here undergraduate degree, she would then need to gain two years of job related experience (like and internship). During this time, she would earn $20,000 in the first year, and...
You are trying to decide how much to save for retirement. Assume you plan to save...
You are trying to decide how much to save for retirement. Assume you plan to save $4,000 per year with the first investment made one year from now. You think you can earn 7.0% per year on your investments and you plan to retire in 45 years, immediately after making your last $4,000 investment. a. How much will you have in your retirement account on the day you retire? b. If, instead of investing $4,000 per year, you wanted to...
Relationship between future value and present value: Mix stream. Using the information in the accompanying table,...
Relationship between future value and present value: Mix stream. Using the information in the accompanying table, answer the questions that follow. Year Cash flow 0 $0 1 800 2 900 3 1000 4 1500 5 2000 a. Determine the present value of the mixed stream of cash flows, using a 5% discount rate. b. Suppose you had a lump sum equal to your answer in part (a) on hand today. If you invested this sum for 5 years and earned...
Just 60 As a winner of a lottery you are going to receive $10,000 every year...
Just 60
As a winner of a lottery you are going to receive $10,000 every year forever, starting one year from today. If the appropriate discount rate is 10%, what is the present value of the award cash flows? $40,000 $20,000 80,000 $100,000 $125,000 QUESTION 60 In the above question, suppose your prize is growing at a constant rate of 2% every year. In other words, you are going to receive $10,000 one year from today, $19,000(1.02) in 2 years...
You are trying to decide how much to save for retirement. Assume you plan to save $5,000 per year with the first investment made one year from now. You think you can earn 5.0% per year on your investments and you plan to retire in 27 years, immediately after making your last S5,000 investment. a. How much will you have in your retirement account on the day you retire? b. If, instead of investing S5,000 per year, you wanted to...
You have won the lottery and your prize is $1,000,000. Since the parentheses on said that the winner had the option of taking a lump sum or an annuity you have to decide the best deal for you. Your choices are: 1) $1,000,000 in 10 years, present Valve 2) 10 annual payments of $100,000 which begin in one year, Nesen vowe Or, 3) a lump sum of $675,000. You figure you could earn 8% on your money. Ignoring taxes, which...
You have won the lottery and your prize is $1.000.000. Since the parentheses said that the winner had the option of taking a lump sum or an annuity you have to decide me best deal for you. Your choices are: 1) $1,000,000 in 10 years, present Valve 2) 10 annual payments of $100,000 which begin in one year, Mesen Vowe Or, 3) a lump sum of $675,000. You figure you could earn 8% on your money. Ignoring taxes, which is...
Your younger sister has come to you for career advice as she is about to enter university, and there are two options open for her. Her first option is to study engineering. If she does this, here undergraduate degree would cost her $15,000 per year for four years. Having obtained here undergraduate degree, she would then need to gain two years of job related experience (like and internship). During this time, she would earn $20,000 in the first year, and...
Just 60
As a winner of a lottery you are going to receive $10,000 every year forever, starting one year from today. If the appropriate discount rate is 10%, what is the present value of the award cash flows? $40,000 $20,000 80,000 $100,000 $125,000 QUESTION 60 In the above question, suppose your prize is growing at a constant rate of 2% every year. In other words, you are going to receive $10,000 one year from today, $19,000(1.02) in 2 years...
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