3. Present Value (L09-3) What is the present value of $140,000 to be received after 30 years with a 14 percent discount rate? a. b. Would the present value of the funds in part a be enough to buy a $2,900 conce ticket?
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- Present value (LO9-4) 4. You will receive $6,800 three years from now. The discount rate is 10 percent. a. What is the value of your investment two years from now? Multiply $6,800 × (1/1.10) or divide by 1.10 (one year’s discount rate at 10 percent). b. What is the value of your investment one year from now? Multiply your answer to part a by (1/1.10). c. What is the value of your investment today? Multiply your answer to part b by (1/1.10). d. Use the formula PV = FV x 1 / (1+i)^n to find the present value of $6,600 received three years from now at 10 percent interest.How much would you be willing to pay today for an investment that would return P1,250 each year for the next 10 years, assuming a discount rate of 12 percent? A. P4,062.75B. P5,062.75C. P6,062.75D. P7,062.75E. None of the aboveWhat would you be ready to spend now for a P1,250 annual return over the following ten years, assuming a discount rate of 12%?A. P4,062.75B. P5,062.75C. P6,062.75D. P7,062.75E. None of the above.
- SUBJECT: ENGINEERING ECONOMICS (a) Identify the Given and the Unknown or what is being asked in the problem (b)Provide the formula to be used (c)Show the complete solution. The final answer is already provided. What is the value of a perpetuity of P100 per year if the discount rate is 5% and the cash flows do not begin until two years from now? Answer: P = P1,814.05Q7: (Present Value and Multiple Cash Flows) Project X offers to pay you $5,300 per year for 8 years, whereas Project Y offers to pay you $7,300 per year for 5 years. Which of these cash flow streams has the higher present value if the discount rate is 5 percent? If the discount rate is 15 percent?Suppose you would get OMR 500 at the end of 6 years and OMR 6700 at the end of 10 years. Calculate present value of both the cash inflows using 7.05% discount rate. .a 6500. b. 6700 C 671244 d. 2710.40 O
- Investment X offers to pay you $4,800 per year for 9 years, whereas Investment Y offers to pay you $7,100 per year for 5 years. If the discount rate is 6 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Investment X Investment Y If the discount rate is 16 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Investment X Investment YHow much would you invest today in order to receive $30,000 in each of the following (for further Instructions on present value In Excel, see Appendix C): A. 10 years at 9% B. 8 years at 12% C. 14 years at 15% D. 19 years at 18%27. If the discount rate is 7%, what is the present value, to the nearest dollar, of an investment that will pay you and you heirs $11,000 per year forever? A) $ 38,881 B. $ 86,200 C. $103,050 D. $157,143 E. $587,955 1111
- 1. If you receive $29 each quarter for 19 years and the discount rate is 0.05, what is the present value? (show the process and can use financial calculator)4. If you receive $116 each month for 28 years and the discount rate is 0.08, what is the present value? (show the process and can use financial calculator)Assume that you will receive $2500 at the end of 6 years and want to know the present value (PV) of that future sum. Assuming a positive interest rate (required rate of return), which of the following is a possible number for the present value of the $2500? Even without knowing the interest rate, it is possible to answer this question. O A. $2742.53 B. $2632.45 O C. $1967.25 OD. $2572.50 O E. None of the above is a possible number.