Question
In: Finance
(Present value of an uneven stream of payments) You are given three investment alternatives to analyze....
(Present
value of an uneven stream of
payments)
You are given three investment alternatives to analyze. The cash flows from these three investments are as follows:
|
Investment |
|||||||||
|
End of Year |
A |
B |
C |
||||||
|
1 |
$ |
1 comma 0001,000 |
$ |
3 comma 0003,000 |
$ |
6 comma 0006,000 |
|||
|
2 |
|
2 comma 0002,000 |
3 comma 0003,000 |
6 comma 0006,000 |
|||||
|
3 |
|
3 comma 0003,000 |
3 comma 0003,000 |
( 6 comma 000 )(6,000) |
|||||
|
4 |
|
( 4 comma 000 )(4,000) |
3 comma 0003,000 |
( 6 comma 000 )(6,000) |
|||||
|
5 |
|
4 comma 0004,000 |
6 comma 0006,000 |
|
16 comma 00016,000 |
||||
What is the present value of each of these three investments if the appropriate discount rate is
99
percent?
a. What is the present value of investment A at an annual discount rate of
99
percent?
Solutions
Expert Solution
Project A
Net present value can also be solved using a financial calculator. The steps to solve on the financial calculator:
- Press the CF button.
- CF0=0. Since there is no initial cash flow for this question.
- Cash flow for each year should be entered.
- Press Enter and down arrow after inputting each cash flow.
- After entering the last cash flow cash flow, press the NPV button and enter the discount rate.
- Press enter after that. Press the down arrow and CPT buttons to get the net present value.
Net present value at 9% discount rate is $4,683.37.
Project B
Net present value can also be solved using a financial calculator. The steps to solve on the financial calculator:
- Press the CF button.
- CF0=0. Since there is no initial cash flow for this question.
- Cash flow for each year should be entered.
- Press Enter and down arrow after inputting each cash flow.
- After entering the last cash flow cash flow, press the NPV button and enter the discount rate.
- Press enter after that. Press the down arrow and CPT buttons to get the net present value.
Net present value at 9% discount rate is $13,618.75.
Project C
Net present value can also be solved using a financial calculator. The steps to solve on the financial calculator:
- Press the CF button.
- CF0=0. Since there is no initial cash flow for this question.
- Cash flow for each year should be entered.
- Press Enter and down arrow after inputting each cash flow.
- After entering the last cash flow cash flow, press the NPV button and enter the discount rate.
- Press enter after that. Press the down arrow and CPT buttons to get the net present value.
Net present value at 9% discount rate is $12,069.92.
In case of any query, kindly comment on the solution.
jeff jeffy answered 1 year agoRelated Solutions
(Present value of an uneven stream of payments) You are given three investment alternatives to analyze....
(Present
value of an uneven stream of
payments)
You are given three investment alternatives to analyze. The cash
flows from these three investments are as follows:
Investment
End of Year
A
B
C
1
$
3,000
$
1,000
$
5,000
2
4,000
1,000
5,000
3
5,000
1,000
(5,000)
4
(6,000)
1,000
(5,000)
5
6,000
4,000
15,000
What is the present value of each of these three investments if
the appropriate discount rate is
15
percent?
a. What is the present...
(Present value of an uneven stream of payments) You are given three investment alternatives to analyze....
(Present
value of an uneven stream of
payments)
You are given three investment alternatives to analyze. The cash
flows from these three investments are as follows:
Investment
End of Year
A
B
C
1
$
2,000
$
2,000
$
5,000
2
3,000
2,000
5,000
3
4,000
2,000
−5,000
4
(5,000)
2,000
(5,000)
5
5,000
5,000
15,000
What is the present value of each of these three investments if
the appropriate discount rate is
10 percent?
(Present value of an uneven stream of payments) You are given three investment alternatives to analyze....
(Present
value of an uneven stream of
payments)
You are given three investment alternatives to analyze. The cash
flows from these three investments are as follows:
Investment
End of Year
A
B
C
1
$
1 comma 0001,000
$
3 comma 0003,000
$
6 comma 0006,000
2
2 comma 0002,000
3 comma 0003,000
6 comma 0006,000
3
3 comma 0003,000
3 comma 0003,000
( 6 comma 000 )(6,000)
4
( 4 comma 000 )(4,000)
3 comma 0003,000
( 6 comma...
(Present value of an uneven stream of payments) You are given three investment alternatives to analyze....
(Present value of an uneven stream of payments) You are given
three investment alternatives to analyze. The cash flows from these
three investments are as follows:
Investment
End of Year
A
B
C
1
$
1,000
$
1,000
$
5,000
2
2,000
1,000
5,000
3
3,000
1,000
(5,000)
4
(4,000)
1,000
(5,000)
5
4,000
5,000
15,000
What is the present value of each of these three investments if
the appropriate discount rate is 8 percent?
a. What is the present...
(Present value of an uneven stream of payments) You are given three investment alternatives to analyze....
(Present value of an uneven stream of payments)
You are given three investment alternatives to analyze. The cash
flows from these three investments are as follows:
Investment
End of Year
A
B
C
1
$
1,000
$
1,000
$
5,000
2
2,000
1,000
5,000
3
3,000
1,000
(5,000)
4
(4,000)
1,000
(5,000)
5
4,000
3,000
15,000
What is the present value of each of these three investments if
the appropriate discount rate is 13 percent?
a. What is the present...
(Present value of an uneven stream of payments) You are given three investment alternatives to analyze....
(Present
value of an uneven stream of
payments)
You are given three investment alternatives to analyze. The cash
flows from these three investments are as follows:
Investment
End of Year
A
B
C
1
$
3,000
$
3,000
$
6,000
2
4,000
3,000
6,000
3
5,000
3,000
(6,000)
4
(6,000)
3,000
(6,000)
5
6,000
5,000
16,000
What is the present value of each of these three investments if
the appropriate discount rate is
8
percent?
a. What is the present...
(Present value of an uneven stream of payments ) You are given three investment alternatives to...
(Present value of an uneven stream of payments ) You are given
three investment alternatives to analyze. The cash flows from these
three investments are as follows:
Investment
End of Year
A
B
C
1
$
3,000
$
3,000
$
4,000
2
4,000
3,000
4,000
3
5,000
3,000
(4,000)
4
(6,000)
3,000
(4,000)
5
6,000
6,000
14,000
What is the present value of each of these three
investments if the appropriate discount rate is 8
percent?
1. What is...
(Present value of annuities and complex cash flows) You are given three investment alternatives to analyze....
(Present value of annuities and complex cash flows)
You are given three investment alternatives to analyze. The cash
flows from these three investments are as follows:
Investment Alternatives:
End of Year
A
B
C
1
10,000
10,000
2
10,000
3
10,000
4
10,000
5
10,000
10,000
6
10,000
50,000
7
10,000
8
10,000
9
10,000
10
10,000
10,000
Assuming an annual discount rate of 20 percent, find the
present value of each investment.
a. What is the present value of...
Problem 4-7 Present and Future Value of an Uneven Cash Flow Stream An investment will pay...
Problem 4-7 Present and Future Value of an Uneven Cash Flow
Stream An investment will pay $200 at the end of each of the next 3
years, $400 at the end of Year 4, $600 at the end of Year 5, and
$800 at the end of Year 6. If other investments of equal risk earn
8% annually, what is its present value? Round your answer to the
nearest cent.What is its future value? Round your answer to the
nearest...
You are given three investment alternatives to analyze. The cash flows from these three investments are...
You are given three investment alternatives to analyze. The cash
flows from these three investments are as follows:
Investment
End of Year
A
B
C
1
$
2 comma 0002,000
$
3 comma 0003,000
$
4 comma 0004,000
2
3 comma 0003,000
3 comma 0003,000
4 comma 0004,000
3
4 comma 0004,000
3 comma 0003,000
( 4 comma 000 )(4,000)
4
( 5 comma 000 )(5,000)
3 comma 0003,000
( 4 comma 000 )(4,000)
5
5 comma 0005,000
5 comma...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- "Ethical Considerations" Please respond to the following: Reflect upon the responsibilities placed on auditors by the...
- A Japanese company has a bond outstanding that sells for 93 percent of its ¥100,000 par...
- What is the difference among the principles of modularization, abstraction, encapsulation, and separation of interface and...
- An investment project costs $20,100 and has annual cash flows of $4,400 for six years. ...
- PUT IN JAVA PROGRAMMING The StockB class: Design a class named StockB that contains the following...
- Draw a DFA for the following ( ∑ = {0,1}): Set of all strings with.
- In the article from Forbes notes that the goal of a leader is not to clone...
ADVERTISEMENT