An investment will generate $10,000 a year for 25 years. If you can earn 10percent on your funds and the investment costs $100,000, should you buy it? Would your answer be different if you could earn only 7 percent?

Q: Consider an investment that costs $100,000 and has a cash inflow of $25,000 every year for 5 years.…

A: IRR is the rate at which NPV of the project is zero. Using excel IRR function

Q: An investment offers $12,000 per year for 20 years, with the first payment occurring one year from…

A: The time value of money concept holds the utmost relevance while determining the future value and…

Q: You deposit $19,000 today in an investment account and the annual rate of return is 12%, what will…

A: Formulas: Future value = Present value *(1+rate)^years

Q: Consider an investment which pays $2,000 at the end of year 1, year 2, and year 3. In year 4, the…

A: Terminal value at end of year 3 = Cash flow in year 4  / (Interest rate - growth rate) = $5000 / (7%…

Q: You can invest $ 35,000 today. This investment offers you a fixed annual return, computed monthly…

A: Perpetuity is the series of payments at fixed intervals for an infinite time period.  The amount of…

Q: You have an investment opportunity that requires an initial investment of $5,500 today and will pay…

A: The acronym IRR stands for internal rate of return. It shows the actual return wherein the present…

Q: You have the opportunity to make an investment that costs $1.000,000. If you make this investment…

A: Net Present Value or NPV is a technique which determines the net present value of the project and it…

Q: An investment will pay you $10,000 in 10 years and it also will pay you $400 at the end of each of…

A: An annuity refers to a series of payments that regularly made at equal intervals. Present value (PV)…

Q: In one year, a project will be worth $10,000. What is that project worth today assuming a discount…

A: We need to use the concept of time value of money to solve the question. According to the concept of…

Q: An investment offers $6,300 per year, with the first payment occurring one year from now. The…

A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…

Q: If you invest $15,000 every year and expect to increase your investment by 6% each year for the next…

A: Annual investment (A) = $15000 Growth rate (g) = 6% r = 7% n = 20 years

Q: Consider two investments:1. Invest $1000 and receive $110 at the end of each month for the next 10…

A: Investment 1: Initial investment=$1000Interest rate=12% Uniform annual benefit=$110 Investment 2:…

Q: You need 85,000 in 10 years. If you can earn .78 percent per month, how much will you have to…

A: Future value is 85,000 Time period is 10years or 10×12 = 120months Interest rate is 0.78%   To Find:…

Q: An investment of $20,000 will create a perpetual after-tax cash flow of $2,000. The required rate of…

A: We have the following information: Investment: $20,000 Perpetual After-tax cash flow of: $2,000…

Q: 1) What monthly nominal rate of return must his investment earn for him to achieve his goal?  2) If…

A: Time value of money (TVM) refers to the method or technique which is used to measure the amount of…

Q: An investment project costs $50,000 and has annual cash flows of $3,500 for 20 years. What is the…

A: Discounted Payback period refers to one of the modern techniques which measure the time that the…

Q: You have the opportunity to make an investment that costs $1.000,000. If you make this investment…

A: YEAR CASH FLOW      0  $                                   (1,000,000.00) 1  $…

Q: You need $32,000 at the end of 10 years. If you can earn 0.625% per month, how much would you need…

A: A concept through which it is studied that the current worth of money is higher than its future…

Q: If you insulate your office for $16,000, you will save $1,600 a year in heating expenses. These…

A: Net Present Value: The net present value is the Net of the present value of future cash inflow and…

Q: Your firm has a potential project that will cost $5,000 now to begin. The project will then generate…

A: NPV means PV of net benefit arises from the future. It can be simple calculated by taking difference…

Q: I expect to save $100,000 in 15 years for my kid's college savings account. Assuming I get a return…

A: Discounting is a technique to compute the present value (PV) of future cashflows by using an…

Q: How much will you pay for a $10,000 automobile in 20 years if the infla-tion rate averages 3 percent…

A: Information Provided: Present amount = $10,000 Term = 20 years Inflation rate = 3%

Q: You are considering a one-year investment. If you put up $1,250, you will get back $1,350. What rate…

A: Here, Present Value of Investment (PV) is $1,250 Future Value of Investment (FV) is $1,350 Time…

Q: Today, you have $30,000 to invest. Two investment alternatives are available to you. One would…

A: Cost of capital=14% Present value cash flow =10000/(1.14)+10000/(1.14)^2 +10000/(1.14)^3…

Q: An investment will generate 10,000 a year for 25 years. If you can earn 10 percent on your funds and…

A: Present value of annuity=Annuity1-1+Interest rate-Time periodRate

Q: You have an opportunity to invest $100,000 now in return for $80,000 in one year and $30,000 in…

A: The NPV is calculated as present value of cash inflows less initial investment

Q: Solve the question: You have been offered a project paying $300 at the beginning of each year for…

A: Given Information: Payment Per year(PMT) is $300 Expected rate of return is 9% Time Period is 20…

Q: How much will I have saved after 6 years by contributing $1,200 at the end of each year if you…

A: Information Provided: Yearly contribution = $1200 Interest rate = 11% Years = 6

Q: An investment that cost P20,000 will provide a return of 12% compounded quarterly. For how long will…

A: Investment (PV) = P20,000 Interest rate = 12% Effective annual interest rate (r) = [1+(0.12/12)]12-1…

Q: If you invest $12,000 today , how much will you have: a) In 6 years at 7 percent? b) In 15 years…

A: Investment amount = $12,000 Time period = 6 years  Rate of interest = 7% In this, the future value…

Q: You plan to buy some undeveloped land that should sell for $180,000 in three years. What is the most…

A: Present Value: The term present value is defined as the current or present day’s value of the amount…

Q: it is desired to save $20,000 by depositing $800 every 3 months in an investment that pays 8%…

A: Annuity means a set of finite number of payments which are the same in size and made in equal…

Q: How many years must you wait for your $4,380 investment to grow to $7,700 if you invest at 5 percent…

A: Future Value: The future value is the value of annuity or the sum lump amount after a certain period…

Q: If you insulate your office for $12,000, you will save $1,200 a year in heating expenses. These…

A: Net present value is the excess of the present value of cash inflows over the present value of cash…

Q: If you insulate your office for $19,000, you will save $1,900 a year in heating expenses. These…

A: a.Initial Investment = $19,000Saving in heating expense = $1,900 Calculation of NPV of the…

Q: If you insulate your office for $18,000, you will save $1,800 a year in heating expenses. These…

A: Formula: NPV = Present values of cash inflows - Present values of cash outflows. Deduction of…

Q: a. You need $17,000 in five years but you only have $12,000 now. At what interest rate must you…

A: As per guidelines, I am supposed to answer 1 question at a time. As the question is not specifically…

Q: An investment that will give you monthly payments for 14 years costs $146,897. If your required…

A: An annuity is a series of cash flows that involve equivalent periodic amounts at equal time…

Q: If you want to accumulate $80,000 and you have $10,000 saved now, how many years will it take if you…

A: Given:

Q: You are considering investing $15,000 in a project today. This project will generate $6,500 per year…

A: Net present value calculation is one of the technique of capital budgeting, under which present…

Q: You have the opportunity to make an investment that costs $1.000,000. If you make this investment…

A: If an investment is able to cover the cost then we say that the investment should be accepted. But…

Q: You are looking into an investment that will pay you $12,000 per year for the next 10 years. If you…

A: Annuity refers to a series of regular payments made for a defined period. Ordinary annuity means…

Q: Keith Riggins expects an investment of $82,014 to return $10,000 annually for several years. If…

A: Formula: P= C×Annuity Factor where,  P is present value of an annuity C is future cash flow

Q: If you invest sh.100,000 at an interest rate of 15 percent, how much will you have at the end of…

A: Note: Hi! Thank you for the question, As per the Honor Code, we are allowed to answer one question…

Q: What is the most you would pay for this investment if you require a 10% return? answer in dollars…

A: Time value of money (TVM) refers to the method or technique which is used to measure the amount of…