Award 1: $40,263 at the end of year 5 Award 2: An annuity of $4,500 over...

Award 1: $40,263 at the end of year 5

Award 2: An annuity of $4,500 over 5 consecutive years that begins at the end of year 5

Award 3: $104,431 at the end of year 15

If the interest rate should rise from 10% to 11%, then the present value of Option 3 at 11% interest compared to the present value of Option 3 at 10% interest would be

Expert Solution

OPTION 3 : I HAVE TAKEN IT AS AWARD 3. IF ANY CHANGE LET ME KNOW, WILL CALCULATE ACCORDINGLY. THANK YOU

jeff jeffy answered 1 year ago

An annuity pays $1 at the end every odd year and $2 at the end of...

An annuity pays $1 at the end every odd year and $2 at the end of each even year (not counting year 0) for 10 years. If the effective annual rate is 6%, what is the present value of the annuity? Show all your work leading to your final answer

Consider the following project: Machine A ($10,000) Inflows Year 1 $4,500 Year 2 4,500 Year 3...

Consider the following project: Machine A ($10,000) Inflows Year 1 $4,500 Year 2 4,500 Year 3 4,500 The IRR for this project is (Write your answer with 2 decimal and as a percentage): （？）Given that the firm's cost of capital is 12%, the MIRR for this project is (Write your answer with 2 decimal and as a percentage) （？）

What’s the future value of a 5%, 5-year ordinary annuity that pays $800 at the end...

What’s the future value of a 5%, 5-year ordinary annuity that pays $800 at the end of each year? If this was an annuity due (pays at beginning of each year), what would its future value be? Taken from Principles of Managerial Finance Edition 15 Chad J. Zutter; Scott B. Smart

You receive an inheritance of a thirty-year annuity, which pays 1 at the end of the...

You receive an inheritance of a thirty-year annuity, which pays 1 at the end of the first year, 2 at the end of the second year, 1 at the end of the third year, 4 at the end of the fourth year, 1 at the end of the fifth year, etc. This pattern will continue such that 1 will be paid out at the end of 29th year and 30 will be paid out at the end of the 30th...

Two payments of $15,000 and $4,500 are due in 1 year and 2 years, respectively. Calculate...

Two payments of $15,000 and $4,500 are due in 1 year and 2 years, respectively. Calculate the two equal payments that would replace these payments, made in 6 months and in 3 years if money is worth 6.5% compounded quarterly.

a. You will receive an annuity payment of $1,200 at the end of each year for...

a. You will receive an annuity payment of $1,200 at the end of each year for 6 years. What will be the total value of this stream of income invested at 7% by the time you receive the last payment? b. How many years of investing $1,200 annually at 9% will it take to reach the goal of $12,000? c. If you plan to invest $1,200 annually for 9 years, what rate of return is needed to reach your goal...

the present value of an annuity for 2 years, with the first payment at the end...

the present value of an annuity for 2 years, with the first payment at the end of 10 years is 40,239 pesos. If money is worth 4.94%, what is the value of an annuity for 5 years?

You purchase a 10 year annuity with payments at the end of each year for $10,000

You purchase a 10 year annuity with payments at the end of each year for $10,000 (where for this annuity effective annual interest is 4%). Immediately after you receive payments, you deposit the payment into an account earning 5% effective annual interest. How much is in this account at the end of 10 years? Use this to find the equivalent effective annual interest rate for this $10, 000 investment over this 10 year period.

Sumeet has a 13 year annuity that pays at the end of each year. The first...

Sumeet has a 13 year annuity that pays at the end of each year. The first payment is $2000 and the payments grow by R = 5% per year. Interest rates are r = 6% annually. a) How much is Sumeet's annuity worth? Consider the following two options: Option A: An annuity with the same number of payments, only each payment is twice the payment of his current annuity. Option B: An annuity where the initial payment is the same...

Sumeet has a 19 year annuity that pays at the end of each year. The first...

Sumeet has a 19 year annuity that pays at the end of each year. The first payment is $6000 and the payments grow by R = 7% per year. Interest rates are r = 4% annually. a) How much is Sumeet's annuity worth? Consider the following two options: Option A: An annuity with the same number of payments, only each payment is twice the payment of his current annuity. Option B: An annuity where the initial payment is the same...

Question