Question
In: Finance
ou are given three investment alternatives to analyze. The cash flows from these three investments are...
ou are given three investment alternatives to analyze. The cash flows from these three investments are shown in the popup window:.... Assuming a discount rate of 21 percent, find the present value of each investment.
a. What is the present value of investment A at 21 percent annual discount rate? $ nothing (Round to the nearest cent.)
b. What is the present value of investment B at 21 percent annual discount rate? $ nothing (Round to the nearest cent.)
|
END OF YEAR |
A |
B |
C |
|
|
1 |
$16,000 |
$16,000 |
||
|
2 |
16,000 |
|||
|
3 |
16,000 |
|||
|
4 |
16,000 |
|||
|
5 |
16,000 |
$16,000 |
|
|
|
6 |
16,000 |
80,000 |
||
|
7 |
16,000 |
|||
|
8 |
16,000 |
|||
|
9 |
16,000 |
|||
|
10 |
16,000 |
16,000 |
||
Solutions
Expert Solution
The following is the Excel worksheet of the calculation of present values of the three projects:-
Following is the formula sheet of the above Excel worksheet for easy understanding of the formulas used:-
Answers:-
Present Value of Investment A = $46815.7494
Present Value of Investment B = $24218.1906
Present Value of Investment C = $41091.9040
jeff jeffy answered 1 year agoRelated Solutions
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Investment
End of Year
A
B
C
1
$
2 comma 0002,000
$
3 comma 0003,000
$
4 comma 0004,000
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3 comma 0003,000
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4 comma 0004,000
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4
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You are given three investment alternatives to analyze. The cash flows from these three investments are...
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Investment
End of Year
A
B
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$
2 comma 0002,000
$
3 comma 0003,000
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3 comma 0003,000
3 comma 0003,000
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b
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A
B
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10,000
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10,000
3
10,000
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10,000
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