Milly’s father has offered to give her one of the following two options: 1. a cash...
Milly’s father has offered to give her one of the following two options: 1. a cash gift of $1,000 now, or 2. an interest free loan of $15,000 now. The loan would be repaid in five equal annual payments over the next five years. Assume Milly’s opportunity cost of funds is 14%. In present value terms, which option is better for Milly, and how much better is it?
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Milly’s father has offered to give her one of the following two
options: 1. a cash...
8. Keri was offered a choice of two payment options to settle her claims in a...
8. Keri was offered a choice of two payment options to settle her claims in a car accident case. The first option would pay her a single lump payment of 1,500,000 immediately, which she would deposit into an account earning an effective annual interest rate of i. The second option would pay her 4 annual payments of 300,000 with the first payment being made immediately and the final one at time 3. Keri can invest the payments from the second...
Leann, with a $300,000 bequest from her father and a business degree from Athabasca University, is...
Leann, with a $300,000 bequest from her father and a business degree from Athabasca University, is considering opening a gift shop in North Edmonton. If her shop is highly successful, she expects an annual net profit of $220,000. If the business is moderately successful, she expects $130,000. If not successful, she expects to have zero net profit. Under any circumstances, she is not contemplating any loss. Her anticipated probabilities of these three options are: 0.5, 0.3 and 0.2, respectively. a)...
give you $1,000 per year for the next 10 1. Your grandmother has offered to give...
give you $1,000 per year for the next 10 1. Your grandmother has offered to give you $1,000 per year to what is the present value of this 10-year. $1.000 annuity discounted back to the present at 5 percent? What will be the present value if you received the $1,000 payment at the beginning of each year? 2. You are graduating from college at the end of this semester, and you have decided to invest $5000 a year for the...
You have decided to buy a used car. The dealer has offered you two options: (FV...
You have decided to buy a used car. The dealer has offered you two options: (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) a. Pay $540 per month for 25 months and an additional $12,000 at the end of 25 months. The dealer is charging an annual interest rate of 24%. b. Make a one-time payment of $16,507, due when you purchase the car. 1-a. Determine how...
You have decided to buy a used car. The dealer has offered you two options: (FV...
You have decided to buy a used car. The dealer has offered you two options: (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) a. Pay $610 per month for 30 months and an additional $12,000 at the end of 30 months. The dealer is charging an annual interest rate of 24%. b. Make a one-time payment of $18,937, due when you purchase the car. 1-a. Determine how...
You have decided to buy a used car. The dealer has offered you two options: (FV of $1, PV of $1, FVA of $1, and PVA of...
You have decided to buy a used car. The dealer has offered you two options: (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) a. Pay $660 per month for 25 months and an additional $12,000 at the end of 25 months. The dealer is charging an annual interest rate of 24%. b. Make a one-time payment of $18,850, due when you purchase the car. 1-a. Determine how...
As a settlement for an insurance claim, Craig was offered one of two choices. He could...
As a settlement for an insurance claim, Craig was offered one of two choices. He could either accept a lump-sum amount of $3609 now, or accept quarterly payments of $202 for the next five years. If the money is placed into a trust fund earning 6.28% compounded annually, which is the better option and by how much? The V option is better by $ . (Round the final answer to the nearest cent as needed. Round all intermediate values to...
You have decided to buy a used car. The dealer has offered you two options: (FV...
You have decided to buy a used car. The dealer has offered you two options: (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) Pay $530 per month for 20 months and an additional $12,000 at the end of 20 months. The dealer is charging an annual interest rate of 24%. Make a one-time payment of $15,392, due when you purchase the car. 1-a. Determine how much cash...
n Layout References Mailings Review View B. Barb has been offered money from her parents. Her...
n Layout References Mailings Review View B. Barb has been offered money from her parents. Her parents will give her $35,000 at the end of the fifth year or either of the two other options. Assuming she can invest at an interest rate of 5% which of the three options will give her the most money five years from now? Show calculations for the value of each option 1. Receive $28,000 now (which she can invest for 5 years) 2....
You have decided to buy a used car. The dealer has offered you two options: (FV...
You have decided to buy a used car. The dealer has offered you two options: (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) a. Pay $610 per month for 30 months and an additional $12,000 at the end of 30 months. The dealer is charging an annual interest rate of 24%. b. Make a one-time payment of $18,937, due when you purchase the car. 1-a. Determine how...
8. Keri was offered a choice of two payment options to settle her claims in a car accident case. The first option would pay her a single lump payment of 1,500,000 immediately, which she would deposit into an account earning an effective annual interest rate of i. The second option would pay her 4 annual payments of 300,000 with the first payment being made immediately and the final one at time 3. Keri can invest the payments from the second...
give you $1,000 per year for the next 10 1. Your grandmother has offered to give you $1,000 per year to what is the present value of this 10-year. $1.000 annuity discounted back to the present at 5 percent? What will be the present value if you received the $1,000 payment at the beginning of each year? 2. You are graduating from college at the end of this semester, and you have decided to invest $5000 a year for the...
You have decided to buy a used car. The dealer has offered you two options: (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) a. Pay $540 per month for 25 months and an additional $12,000 at the end of 25 months. The dealer is charging an annual interest rate of 24%. b. Make a one-time payment of $16,507, due when you purchase the car. 1-a. Determine how...
You have decided to buy a used car. The dealer has offered you two options: (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) a. Pay $610 per month for 30 months and an additional $12,000 at the end of 30 months. The dealer is charging an annual interest rate of 24%. b. Make a one-time payment of $18,937, due when you purchase the car. 1-a. Determine how...
You have decided to buy a used car. The dealer has offered you two options: (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) a. Pay $660 per month for 25 months and an additional $12,000 at the end of 25 months. The dealer is charging an annual interest rate of 24%. b. Make a one-time payment of $18,850, due when you purchase the car. 1-a. Determine how...
As a settlement for an insurance claim, Craig was offered one of two choices. He could either accept a lump-sum amount of $3609 now, or accept quarterly payments of $202 for the next five years. If the money is placed into a trust fund earning 6.28% compounded annually, which is the better option and by how much? The V option is better by $ . (Round the final answer to the nearest cent as needed. Round all intermediate values to...
n Layout References Mailings Review View B. Barb has been offered money from her parents. Her parents will give her $35,000 at the end of the fifth year or either of the two other options. Assuming she can invest at an interest rate of 5% which of the three options will give her the most money five years from now? Show calculations for the value of each option 1. Receive $28,000 now (which she can invest for 5 years) 2....
You have decided to buy a used car. The dealer has offered you two options: (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) a. Pay $610 per month for 30 months and an additional $12,000 at the end of 30 months. The dealer is charging an annual interest rate of 24%. b. Make a one-time payment of $18,937, due when you purchase the car. 1-a. Determine how...
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