Investment End of Year A B C 1 $ 2,000 $ 1,000 $ 4,000 2 3,000 1,000 4,000 3 4,000 1,000 (4,000) 4 (5,000) 1,000 (4,000) 5 5,000 3,000 14,000 What is the present value of each of these three investments if the appropriate discount rate is 11 percent? a. What is the present value of investment A at an annual discount rate of 11 percent? b. What is the present value of investment B at an annual discount rate of 11 percent C. What is the present value of investment C at an annual discount rate of 11 percent?
Investment End of Year A B C 1 $ 2,000 $ 1,000 $ 4,000 2 3,000 1,000 4,000 3 4,000 1,000 (4,000) 4 (5,000) 1,000 (4,000) 5 5,000 3,000 14,000 What is the present value of each of these three investments if the appropriate discount rate is 11 percent? a. What is the present value of investment A at an annual discount rate of 11 percent? b. What is the present value of investment B at an annual discount rate of 11 percent C. What is the present value of investment C at an annual discount rate of 11 percent?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Investment
|
|
|||||||
End of Year
|
A
|
B
|
C
|
|||||
---|---|---|---|---|---|---|---|---|
1
|
$
|
2,000
|
|
$
|
1,000
|
$
|
4,000
|
|
2
|
|
3,000
|
|
|
1,000
|
|
4,000
|
|
3
|
|
4,000
|
|
|
1,000
|
|
(4,000)
|
|
4
|
|
(5,000)
|
|
|
1,000
|
|
(4,000)
|
|
5
|
|
5,000
|
|
|
3,000
|
|
14,000
|
|
What is the present value of each of these three investments if the appropriate discount rate is
11
percent?a. What is the present value of investment A at an annual discount rate of
11
percent?b. What is the present value of investment B at an annual discount rate of 11 percent
C. What is the present value of investment C at an annual discount rate of 11 percent?
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 5 steps with 6 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Essentials Of Investments](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781260013924/9781260013924_smallCoverImage.jpg)
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
![FUNDAMENTALS OF CORPORATE FINANCE](https://www.bartleby.com/isbn_cover_images/9781260013962/9781260013962_smallCoverImage.gif)
![Financial Management: Theory & Practice](https://www.bartleby.com/isbn_cover_images/9781337909730/9781337909730_smallCoverImage.gif)
![Essentials Of Investments](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781260013924/9781260013924_smallCoverImage.jpg)
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
![FUNDAMENTALS OF CORPORATE FINANCE](https://www.bartleby.com/isbn_cover_images/9781260013962/9781260013962_smallCoverImage.gif)
![Financial Management: Theory & Practice](https://www.bartleby.com/isbn_cover_images/9781337909730/9781337909730_smallCoverImage.gif)
![Foundations Of Finance](https://www.bartleby.com/isbn_cover_images/9780134897264/9780134897264_smallCoverImage.gif)
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
![Fundamentals of Financial Management (MindTap Cou…](https://www.bartleby.com/isbn_cover_images/9781337395250/9781337395250_smallCoverImage.gif)
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
![Corporate Finance (The Mcgraw-hill/Irwin Series i…](https://www.bartleby.com/isbn_cover_images/9780077861759/9780077861759_smallCoverImage.gif)
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education