Homework Answers
The given statement is FALSE
Higher rate will lead to a lower present value as present value =
Future value/(1+Discount rate)^number of years
Lower rate should always be chosen
Hence, the answer is FALSE
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If you had a choice of choosing a payment of $5,000 to be received in five...
22. Calculate the present value of $5,000 received five years from today if your investments pay...
22. Calculate the present value of $5,000 received five years from today if your investments pay a. 6 percent compounded annually b. 8 percent compounded annually c. 10 percent compounded annually d. 10 percent compounded semiannually e. 10 percent compounded quarterly What do your answers to these questions tell you about the relation between present values and interest rates and between present values and the number of compounding periods per year? (LG 2-9) 23. Calculate the future value in five years of $5,000 received today if your...
If the interest rate is 6 percent, then the present value of $5,000 received ten years...
If the interest rate is 6 percent, then the present value of $5,000 received ten years from today is $2,583.34. a. True b. False
(Present-value comparison) You are offered $1,400 today, $5,000 in 12 years, or $29,000 in 20 years
(Present-value comparison) You are offered $1,400 today, $5,000 in 12 years, or $29,000 in 20 years. Assuming that you can earn 13 percent on your money, which offer should you choose? a. What is the present value of $29,000 in 20 years discounted at 13 percent interest rate?
you will receive $5,000 a year in real terms for the next 5 years. each payment will be received at the end of the peri...
you will receive $5,000 a year in real terms for the next 5 years. each payment will be received at the end of the period with the first payment occurring one year from today. the relevant nominal discount rate is 10 percent and the inflation rate is 2 percent. what are your winnings worth today in real dollars ?
$1,000 received 5 years from today discounted at an annual rate of 10% has a smaller...
$1,000 received 5 years from today discounted at an annual rate of 10% has a smaller present value than $1,000 received 10 years from today discounted at an annual rate of 5%. Is it true or false?
Multiple Choice Question An advance payment of $1,000 for services was received on December 1 and...
Multiple Choice Question An advance payment of $1,000 for services was received on December 1 and was recorded as a liability. By the end of the year, $400 had been eamed Demonstrate what the correct adjusting entry should include by choosing the correct statement below.
Your father offers you a choice of $105,000 in 12 years or $47,000 today. a. If...
Your father offers you a choice of $105,000 in 12 years or $47,000 today. a. If money is discounted at 8 percent, which should you choose? b. If money is still discounted at 8 percent, but your choice is between $105,000 in 9 years or $47,000 today, which should you choose? Include financial calculator steps, including the keys pressed on the calculator to solve each question.
Your grandfather has offered you a choice of one of the three following alternatives: $10,500 now...
Your grandfather has offered you a choice of one of the three following alternatives: $10,500 now $5,000 a year for nine years or $61,000 at the end of nine years. Use Appendix Band Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods. 0-1. Assuming you could eam 7 percent annually, compute the present value of each alternative: (Do not round intermediate calculations. Round your final answers to 2 decimal places.) Present...
Your grandfather has offered you a choice of one of the three following alternatives: $7,500 now:...
Your grandfather has offered you a choice of one of the three following alternatives: $7,500 now: $2.200 a year for nine years; or $31,000 at the formula and financial calculator methods. e years. Use Appendix 8 and Appendix D for an approximate answer, but calculate your final answer using a-1. Assuming you coul calculations. Round your final answers to 2 decimal places.) d earn 10 percent annually, compute the present value of each alternative: (Do not round intermediate Present Value...
Your father offers you a choice of $125,000 in 11 years or $45,500 today. Use Appendix B as an ap...
Your father offers you a choice of $125,000 in 11 years or $45,500 today. Use Appendix B as an approximate answer, but calculate your final answer using the formula and financial calculator methods. a-1. If money is discounted at 8 percent, what is the present value of the $125,000? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) a-2. Which offer should you choose? $45,500 today $125,000 in 11 years b-1. Now assume the offer is...
Multiple Choice Question An advance payment of $1,000 for services was received on December 1 and was recorded as a liability. By the end of the year, $400 had been eamed Demonstrate what the correct adjusting entry should include by choosing the correct statement below.
Your grandfather has offered you a choice of one of the three following alternatives: $10,500 now $5,000 a year for nine years or $61,000 at the end of nine years. Use Appendix Band Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods. 0-1. Assuming you could eam 7 percent annually, compute the present value of each alternative: (Do not round intermediate calculations. Round your final answers to 2 decimal places.) Present...
Your grandfather has offered you a choice of one of the three following alternatives: $7,500 now: $2.200 a year for nine years; or $31,000 at the formula and financial calculator methods. e years. Use Appendix 8 and Appendix D for an approximate answer, but calculate your final answer using a-1. Assuming you coul calculations. Round your final answers to 2 decimal places.) d earn 10 percent annually, compute the present value of each alternative: (Do not round intermediate Present Value...
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