Assuming a discount rate of 6 percent, which of the following has the highest cash value...

Assuming a discount rate of 6 percent, which of the following has the highest cash value (present value at the date of purchase)? Assume all purchase options below are as at the same date. There will be a single cash flow for all of the alternatives (balloon payments at the end of the financing period).

a. $90,000 in 3 years

b. $60,000 today

c. $120,000 in 8 years

d. $100,000 in 5 years

Solutions

Expert Solution

jeff jeffy answered 2 years ago

Next > < Previous

Related Solutions

Given a discount rate of 11%, which of the following cash flow streams has the highest...

Given a discount rate of 11%, which of the following cash flow streams has the highest present value? Multiple Choice 12 equal payments of $600 beginning at the end of Year 1. 10 equal payments of $600 beginning immediately. 12 equal payments of $550 beginning immediately.

Which one of the following has the highest effective annual rate? 6 percent compounded annually 6...

Which one of the following has the highest effective annual rate? 6 percent compounded annually 6 percent compounded semiannually 6 percent compounded quarterly 6 percent compounded daily

What is the present value of the following cash flows at a discount rate of 6%?...

What is the present value of the following cash flows at a discount rate of 6%? Years 1 – 5 $10,000 Years 6 – 10 $12,000 Years 11 – 20 $15,000 A. $109,896 B. $119,157 C. $141,544 D. $129,639 If a professor currently earns $80,000 per year and expects annual salary increases of 3%, approximately how long will the professor have to work before his/her annual salary reaches $500,000 per year? A. 62 years B. 49 years C. 101 years...

Find the present value of the following cash flow stream assuming a discount rate of 8%:...

Find the present value of the following cash flow stream assuming a discount rate of 8%: A payment of $10,000 received at the end of each MONTH over the coming 4 years, followed by a payment of $5000 received at the end of each MONTH over the 6 years after that. a.) $556,975.15 b.) $409,619.13 c.) $285,172.61 d.) $207,297.84 e.) $616,916.97

What is the PV of the following cash flows, assuming a 5% discount rate?

What is the PV of the following cash flows, assuming a 5% discount rate?Initial investment – year 0: $(1,000,000)Year 1 cash flows: $100,000Year 2 cash flows: $100,000Year 3 cash flows: $100,000Year 4 -sale: $1,200,000

If the appropriate discount rate for the following cash flows is 11.7 percent per year, what is the present value of the cash flows?

If the appropriate discount rate for the following cash flows is 11.7 percent per year, what is the present value of the cash flows?YearCash Flow1$21,6002$25,9003$38,7004$16,200 Group of answer choices$71,407.19$74,221.80$78,270.77$80,407.16$81,121.03

Given a 6 percent discount rate compounded quarterly, what is the present value of a perpetuity...

Given a 6 percent discount rate compounded quarterly, what is the present value of a perpetuity of $100 per month if the first payment does not begin until the end of year five? Please give explanation and formula! Thanks!

If the appropriate discount rate for the following cash flows is 13 percent, what is the...

If the appropriate discount rate for the following cash flows is 13 percent, what is the net present value of these cash flows assuming the initial cost is $700? Should you go through with this investment? YEAR CASH FLOW 0- $ -700 1- 100 2- 200 3- 300 4- 400

If the relevant discount rate for the following set of cash flows is 7 percent, the...

If the relevant discount rate for the following set of cash flows is 7 percent, the profitability index is . If the discount rate is 15 percent, the profitability index is . If the discount rate is 23 percent, the profitability index is . (Round your answers to 3 decimal places. (e.g., 32.162)) Year Cash Flow 0 −$9,900 1 5,400 2 4,400 3 3,900

Calculate the NPV for the following investment with 6 years life time assuming a discount rate...

Calculate the NPV for the following investment with 6 years life time assuming a discount rate of 20% per year: The investor is a Non-integrated petroleum company Total producible oil in the reserve is estimated to be 2,400,000 barrels Production rate will be 400,000 barrels of oil per year from year 1 to year 6 Mineral rights acquisition cost for the property will be $1,600,000 at time zero Intangible drilling cost (IDC) is expected to be $7,000,000 at time zero...

Subjects