The present value of a future cash receipt decreases as the time till receipt goes up...
The present value of a future cash receipt
| decreases as the time till receipt goes up |
| increases as the interest rate goes up |
| increases as the time till receipt goes up |
| decreases as the interest rate goes down |
Homework Answers
| The present value of a future cash receipt decreases as the time till receipt goes up |
| As the time till receipt goes up, the present value will decrease as amount received at a later date is less worth than same amount received at an earlier date. |
| Option 1 is correct |
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The present value of a future cash receipt
decreases as the time till receipt goes up...
The present value of future cash flows: 3) increases as the discount rate decreases. O increases...
The present value of future cash flows: 3) increases as the discount rate decreases. O increases as the number of discounting periods increase. decreases as the number of discounting periods decrease. O decreases as the discount rate decreases.
The concept that timing of the receipt of cash affects it is demonstrated by present and...
The concept that timing of the receipt of cash affects it is demonstrated by present and future value. These values are based on several variables: the amount of cash, whether it is a one-time payment, a series of equal payments, or unequal payments, and when the cash is received. The interest rate is another variable that has a very large effect on the present and future values. Use these concepts to answer why a lottery winner would choose to take...
Ch 05: Assignment Time Value of Money Back to Assignment Attempts: Average:/4 3. Present value Finding...
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The computation of the current value of an asset using the present value of future cash...
The computation of the current value of an asset using the present value of future cash flows method does not include the A. Productive life of the asset. B. Applicable interest rate. C. Future amounts of cash receipts or cash savings. D. Cost of alternate uses of funds given up.
Exercise 10-2A Determining the present value of a lump-sum future cash receipt LO 10-1 Larry Mattingly...
Exercise 10-2A Determining the present value of a lump-sum future cash receipt LO 10-1 Larry Mattingly turned 20 years old today. His grandfather had established a trust fund that will pay him $82,000 on his next birthday. However, Larry needs money today to start his college education, and his father is willing to help. Mr. Mattingly has agreed to give Larry the present value of the $82,000 future cash inflow, assuming a 10 percent rate of return. (PV of $1...
Larry mattingly Exercise 16-2 Determining the present value of a lump-sum future cash receipt LO 16-1...
Larry mattingly
Exercise 16-2 Determining the present value of a lump-sum future cash receipt LO 16-1 Larry Mattingly turned 20 years old today. His grandfather had established a trust fund that will pay him $72,000 on his next birthday However, Larry needs money today to start his college education, and his father is willing to help. Mr. Mattingly has agreed to give Larry the present value of the $72,000 future cash inflow, assuming a 10 percent rate of return. (PV...
Use future value and present value calculations to determine the following (a) The future value of...
Use future value and present value calculations to determine the following (a) The future value of a $400 savings deposit after eight years at an annual interest rate of 3 percent. Use Table 1. (Round time value factor to 3 decimal places and final answer to 2 decimal places.) Future value (b) The future value of saving $1,800 a year for five years at an annual interest rate of 4 percent. Use Table 2. (Round time value factor to 3...
What are three methods used to calculate the present value of a future cash flow?
The Timing and Value of Cash FlowsMy chapter outline is listed as follows (The methods should be pertaining to these concepts):Valuing Claims to Future Cash Flows: A comparison approachThe Basis of Time Value Calculations: The Compounding ProcessThe Present Value of a Single Cash FlowThe Future Value of a Single Cash FlowThe Present Value of a Multiple Cash Flow StreamThe Future Value of a Multiple Cash Flow StreamThe Rate of Return on an InvestmentNon-Annual Compounding/Discounting Intervals
All else held constant, the present value of a bond increases when the: coupon rate decreases....
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4. Finding the interest rate and the number of years The future value and present value...
4. Finding the interest rate and the number of years The future value and present value equations also help in finding the interest rate and the number of years that correspond to present and future value calculations. If a security currently worth $12,800 will be worth $16, 124.31 three years in the future, what is the implied interest rate the investor will earn on the security-assuming that no additional deposits or withdrawals are made? 8.00% 6.40% 7.94% 1.26% for this...
The present value of future cash flows: 3) increases as the discount rate decreases. O increases as the number of discounting periods increase. decreases as the number of discounting periods decrease. O decreases as the discount rate decreases.
Ch 05: Assignment Time Value of Money Back to Assignment Attempts: Average:/4 3. Present value Finding a present value is the reverse of finding a future value is the process of calculating the present value of a cash flow or a series of cash flows to be received in the future Which of the following investments that pay will $10,500 in 13 years will have a lower price today? The security that earns an interest rate of 14.50%. The security...
Exercise 10-2A Determining the present value of a lump-sum future cash receipt LO 10-1 Larry Mattingly turned 20 years old today. His grandfather had established a trust fund that will pay him $82,000 on his next birthday. However, Larry needs money today to start his college education, and his father is willing to help. Mr. Mattingly has agreed to give Larry the present value of the $82,000 future cash inflow, assuming a 10 percent rate of return. (PV of $1...
Larry mattingly
Exercise 16-2 Determining the present value of a lump-sum future cash receipt LO 16-1 Larry Mattingly turned 20 years old today. His grandfather had established a trust fund that will pay him $72,000 on his next birthday However, Larry needs money today to start his college education, and his father is willing to help. Mr. Mattingly has agreed to give Larry the present value of the $72,000 future cash inflow, assuming a 10 percent rate of return. (PV...
Use future value and present value calculations to determine the following (a) The future value of a $400 savings deposit after eight years at an annual interest rate of 3 percent. Use Table 1. (Round time value factor to 3 decimal places and final answer to 2 decimal places.) Future value (b) The future value of saving $1,800 a year for five years at an annual interest rate of 4 percent. Use Table 2. (Round time value factor to 3...
4. Finding the interest rate and the number of years The future value and present value equations also help in finding the interest rate and the number of years that correspond to present and future value calculations. If a security currently worth $12,800 will be worth $16, 124.31 three years in the future, what is the implied interest rate the investor will earn on the security-assuming that no additional deposits or withdrawals are made? 8.00% 6.40% 7.94% 1.26% for this...
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