An investment is expected to yield $300 in three years, $500 in five years and $300 in seven years. What is the present value of this investment if the opportunity rate is 5% per annum?   a) $735 b) $885 C) $865 D) $900

Q: Find the nominal rate of an investment with duration of 4 and a half years compounded once a year.…

A: The nominal rate of investment can be found using the RATE function in excel. RATE = (NPER, PMT, PV,…

Q: Find the time required for an investment of 5000 dollars to grow to 6700 dollars at an interest rate…

A: we have convert annual rate to quarter period interest and period into quarterly period also.

Q: Which of the following investments has a larger future value: Investment A, a $1,000 investment…

A: Given:

Q: An investment project provides cash inflows of $1325 per year for eight yea payback period if the…

A: Year cash flow 1                            1                       1,325.00 2…

Q: 3. An investment offers P4,900 per year for 15 years, with the first payment occurring one year…

A: An Annuity is a continuous flow of systematic timely cash flows made or received for a stipulated…

Q: You are told that if you invest $11,100 per year for 19 years (all payments made at the beginning of…

A: Present Value (PV) is current value of amount to be transacted in future. It is computed…

Q: An investment will pay $150 at the end of each of the next 3 years, $250 at the end of Year 4, $300…

A:

Q: A company is considering an investment that will cost $759,000 and have a useful life of 6 years.…

A: NPV is the net current worth of cash flows that are expected to occur in the future.

Q: If Quail Company invests $50,000 today, it can expect to receive $10,000 at the end of each year for…

A: Net Present Value = Present value of cash inflows + Present value of salvage value - Initial…

Q: You are valuing an investment that will pay you $25,000 per year for the first 7 years, $29,000 per…

A: Annual discount  rate is 13% Amount paid for first 7 years is $25,000 Amount paid for next 12 years…

Q: An investment of $40,000 yields a net annual income of $8,000 for 11 years. What is the annual…

A: Information Provided: Present value of investment = $40,000 Annual Income = $8000 Term = 11 years

Q: Net returns from an investment are estimated to be $13,000 per year for 12 years. The investment…

A: Capital investment is a long-term capital expenditure that requires huge capital for a long-term…

Q: An investment offers $6,100 per year for 15 years, with the first payment occurring today. If the…

A: present value of annuity due formula: PVADUE=A×1-11+rnr×1+r where, A=annuity r=rate n=number of…

Q: Which of the following investment options will maximize the rate of return in a period of 20 years?…

A: Monthly Compounding Number of compounding periods = 12   Interest Rate = Rate / Number of…

Q: An investment project provides cash inflows of $1087 per year for eight years. What is the project…

A: The payback period is a capital budgeting technique that measures the time length that a project…

Q: Investment A opportunity involves a payment of $20,000.00 and is expected to produce an income…

A: Investment A  Payment = $20,000  f1(t) = 33000e0.025t  Time = 10 years Investment B Payment =…

Q: Consider an investment that offers $4,000, $5,000 and $6,000 in the next 3 years, with the first…

A: Present value is the concept of time value of money. Time value of money concept states that value…

Q: An investment will pay $100 at the end of each of the next 3 years, $200 at the end of Year 4, $300…

A: Present value can be calculated by using this equation PV =FV(1+r)n where FV =Future value PV…

Q: What is the effective annual rate (EAR) if the stated rate is 8 percent and compounding occurs…

A: Computation of effective annual rate when rate is 8% and compounding is semiannually is as…

Q: An investment project has annual cash inflows of $2800, $3700, $ 5100, and $4300, for the next 4…

A: Discount Rate = 9%   Cash Flows:  Year  Cash Flow 0 -5,200 1 2,800 2 3,700 3 5,100 4…

Q: If an Investment of $5000 will grow to $8000 in four years with quarterly compounding the effective…

A: We will find the interest rate by applying the requisite formula where we can use the amount 8000…

Q: An investment of P50,000 is made at the beginning of each month for 5 years. How much will the…

A: The investment value can be calculated as future value of annuity due

Q: Mr Lee's investment now of 50,000 pesos yields 14,000pesos at the end of the 5th year, 34,000 pesos…

A: The rate of return can be found using the IRR Function in excel Cash flows can be laid out in the…

Q: i) To what sum will the investment grow at the end of 5 years? i) How much interest will be earned…

A: Given information is: A local University is planning to invest $500,000 every 3 months in an…

Q: At the end of each year for the next 18 years you will receive cash flow of $3700 the initial…

A: The present value is the value of the sum received at time 0 or the current period. It is the value…

Q: Suppose you invest $1000 at 6% per annum compounded annually. Approximately how many years would it…

A: In the given question we require to calculate the the number of years in which $1000 will become…

Q: An investment promises to pay 3500 per year for the next 3 years and then 4000 per year for the…

A: Year Income 1 3500 2 3500 3 3500 4 4000 5 4000 Discount rate = 15%

Q: An investment of $23,500 in new equipment will generate income of $6,500 per year for 10 years. What…

A: PV of cash outflow=$23,500 Income per year=$6,500 Duration(n)=10 years   As per the equation of IRR,…

Q: If an Investment of $5000 will grow to $8000 in four years with quarterly compounding the effective…

A: Investment = 5000 N = 4 years i.e. 16 quarters (Quarterly compounding) Future Value = 8000 Effective…

Q: A firm is considering a six-year project with a payback period of 3.5 years. It has cash flows the…

A: Payback period means the period when the project is able to recover its initial investment without…

Q: An investment of $50,000 is proposed at an interest rate of 8%. What is the future amount in 10…

A: Simple Interest Future Value = Present Value * (1+rt) Where,  r = rate of interest  t = no. of years…

Q: A fixed interest investment is growing at 2.9% per year. Its current value is $3500. a.) What will…

A: The concept of the time value of money states that the same amount of money has more value today…

Q: An investment will pay $100 at the end of each of the next 3 years, $200 at the end of Year 4, $300…

A: Time value The amount of money received today has more value than that of receiving the same amount…

Q: What is the present worth of the project, whichrequires $130,000 investment now and receives$40,000…

A: given, rate =14% Initial investment = $130,000 annual cashflow=$40,000 year=6

Q: An investment project involves an investment now of 100. In one year, a positive cash flow of 40 is…

A: Capital budgeting is the process by which a corporation examines potential large projects or…

Q: An investment of $80,000 is expected to generate a net annual income of $27,000 for 5 years. If the…

A: Present worth can be calculated by using this equation Net Present worth = -investment -…

Q: If $10,000 is invested in a certain business at the start of the​ year, the investor will receive…

A: Basic Details: 1. Amount Invested = $10000 2. Annual Cash Flow = $3000 3. Term = 4 Years 4. Interest…

Q: An investment requires an initial disbursement of €2,500,000 and the duration of the project is 3…

A: Capital budgeting indicates the evaluation of the profitability of possible investments and projects…

Q: I need a detailed explanation and assistance to solve this problem: An investment offers $6,800 per…

A: a) Calculation of present value of investment at 7% required returnThe present value of investment…

Q: 3. Your investment will pay $500 at the beginning of each of first 2 years, $100 at the end of…

A: Present value can be calculated by using this equation PV =FV/(1+r)n and  FV =PV(1+r)n where PV…

Q: An investment promises to pay $7,000 at the end of each year for the next six years and $3,000 at…

A: In the given case, an investment will pay $7,000 at the end of each year for the next six years and…

Q: An investment of s80.000 is expected to generate a net annuol income of $27,000 for 5 years f the…

A: Investment = 80,000 Net Annual Income = 27,000 for 5 years MARR = 13% Total Time Period = 20 years…

Q: For this investment, an initial amount of $25,000 should be paid this year (t=0). As of next year…

A: The present value method is a method of finding the productivity of the project by discounting the…

Q: An investment will have a future value equal to Php180,250 after 6 years. It has a nominal rate of…

A: Time Value of money states that each dollar has earning capacity hence a dollar today is worth more…

Q: What will be the maturity value of P12,000 invested for four (4) years at 15% compounded quarterly?…

A: Invested amount (X) = P 12000 n = 4 years = 16 quarters r = 15% per annum = 3.75% per quarter

Q: Assume that JL Corporation would like to know the amount of investment it will make in order to…

A: Amount of investment that JL Corporation should invest today in order to receive P500,000 after…

Q: an investment will pay $2,445 two years from now, $3,433 four years from now, and $1,611 five years…

A: The present value of an investment is affected by the inflation rate and growth rate for a specified…

Q: alculate, to the nearest cent, the future value FV (in dollars) of an investment of $10,000 at the…

A: The future value of a single sum deposited can be calculated by using this equation Future value…

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.