Option 1Option 2Option 3PaymentToday$ 90,000Payment in OneYear45,000$ 049,500103,500TotalPayment$ 90,00094,500103,500Required:1-a. Assuming an annual discount rate of 11%, calculate the present value and the total cost.1-b. Which option's cost has the lowest present value?Answer is complete but not entirely correct.Complete this question by entering your answers in the tabs below.Req 1AReq 1BAssuming an annual discount rate of 11%, calculate the present value and the total cost.Note: Use tables, Excel, or a financial calculator. Round your answers to 2 decimal places. (FV of $1, PV of $1, FVA of $1,and PVA of $1)Option 1PaymentToday$ 90,000Present Value ofPayment in OneTotal PresentValue (or TotalYearCost)$Option 245,000Option 300S40,540 540.0090,000.00130,540.540.00

To compute the present values we will discount the cash flows. For the "payment today" column no…

Answered: Option 1 Option 2 Option 3 Payment…

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

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nt question Q1. Find the present value of 30 annual payments of $2,000 per annum where the first payment is made 14 years from now. So there are 30 annual payments from t=14 to t=43 inclusive. The discount rate is 5% pa. The present value of these payments is: Question 8Select one: a. $4,908.18 b. $16,304.68 c. $21,212.85 d. $30,282.15 e. $30,744.9
What is the present discounted value of $400 to be received one year from now plus $500 to be received two years from now if the interest rate is 4%? А. $751.84 $860.05 C. $899.04 D. $912.89 B.
What is the Present Value of $10,000 to be received 15 years from today at 7.0% Question 8 options: 5,314.80 6,229.81 3,624.46 4,218.59 2,851.43
8 es #18 X You are considering two options: • Investment A pays 7.35% interest, compounded semiannually. • Investment B pays 7.4% interest, compounded annually. . What is the effective rate for Investment A? Answer as a percent, rounded to two decimal places. What is the effective rate for Investment B? Answer as a percent, rounded to two decimal places. % Which option should you choose? O Investment A Investment B O The given information is not enough to say.. Note: the correct answer to the third part is determined based on your answers to the previous two. Add Work > Next Question
Question content area top Part 1 (Present value of a perpetuity) At a discount rate of 17.50%, find the present value of a perpetual payment of $2,500 per year. If the discount rate were lowered to 8.75%, half the initial rate, what would be the value of the perpetuity? Question content area bottom Part 1 a. If the discount rate were 17.50%, the present value of the perpetuity is $enter your response here. (Round to the nearest cent.) Part 2 b. If the discount rate were lowered to 8.75%, half the initial rate, the present value of the perpetuity is $enter your response here. (Round to the nearest cent.)
Question content area top Part 1 (Present value of a complex stream) Don Draper has signed a contract that will pay him $55,000 at the end of each year for the next 10 years, plus an additional $120,000 at the end of year 10. If 8 percent is the appropriate discount rate, what is the present value of this contract? Question content area bottom Part 1 The present value of the contract is $enter your response here. (Round to the nearest cent.)
Question content area top Part 1 (Present value of a perpetuity) At a discount rate of 17.50%, find the present value of a perpetual payment of $ 5,000 per year. If the discount rate were lowered to 8.75%, half the initial rate, what would be the value of the perpetuity? Question content area bottom Part 1 a. If the discount rate were 17.50%, the present value of the perpetuity is $ enter your response here . (Round to the nearest cent.) Part 2 b. If the discount rate were lowered to 8.75%, half the initial rate, the present value of the perpetuity is $ enter your response here . (Round to the nearest cent.)
QUESTION 19 You buy the property at the price of $7,000,000, and it is expected to generate $468015 net operating income in the following year. What is your 'going in' Cap Rate at purchase? Write your answer in percent, but do not include the % sign (e.g. if you get 5.63898%, write 5.64).
Question: 1533 Ontario St SE, Olympia, WA 98501 Purchase price = Today's Zillow Zestimate ... 1533 Ontario St SE, Olympia, WA 98501 Purchase price = Today's Zillow Zestimate 521500You will pay a down payment = 15% of purchase price 78225Mortgage payments = 30 year fixed loan at 3.8% interest (Loan = 85% of purchase price) 2077Fees to purchase the home = 5% of the purchase price 26075Property taxes are paid all 5 years at the 2019 property tax rate 17890Insurance for the home is $1,000/year 5000The selling price = purchase price * (1+ (% Value (price) estimate change of the last 5 years) (note: this is different process than what is outlined in the video) Fees to sell the home = 5% of the selling price. I need help finding the selling price of this home.
Exercise F-1 (Static) Future value and present value To determine the appropriate discount factor(s) using tables, click here to view Tables L. L . or IV in the appendix. Alternatively, if you calculate the discount factor(s) using a formula, round to six (6) decimal places before using the factor in the problem. Required a. The future value of $30,000 invested at 8 percent for 10 years. b. The future value of eight annual payments of $2,000 at 9 percent interest. c. The amount that must be deposited today (present value) at 8 percent to accumulate $60,000 in five years. d. The annual payment on a 10-year, 6 percent, $50,000 note payable. Complete this question by entering your answers in the tabs below. Required A Required B The future value of $30,000 invested at 8 percent for 10 years. (Round your answers to the nearest whole dollar amount.) Future value Required C Required D Required A Show less A Required B >
plan A plan B plan C Down payment 1,789.91 2,309.65 3,764.51 Annual payments 5,097.70 7,450.16 9,845.78 Years 20 20 20 Discount rate 12% 12% 12% What is the present value of plan B?
Two mutually exclusive alternatives A and B are being considered: Year A 1 A 2 0 1 -$2500 $746 -$6000 $1664 2 3 4 5 $746 $746 $746 $746 $1664 $1664 $1664 $1664 The minimum attractive rate of return is 8%. After calculation we can find that the internal rates of return: for A 1, IRRA1 = 17%, for B, IRRA2 = 14% and for A 2-A 1, IRRA2-A1 = 9.8%. Which of the following statements is correct? Select A 1 because IRRA 1 > IRRA 2 Select neither A 1 nor A 2 because IRRA 1 > MARR and IRRA 2 > MARR Select A 1 because IRRA 2-A 1 > MARR select A 2 because IRR 2-1 > MARR

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