Heba is expecting to get OMR 50000 at the end of 5 years. How much will be the value today if: Option a: The discount rate is 9.02% half yearly Option b: The discount rate is 128% quarterly Select one: a. Option a: 32000.25 Option b: 36000.55 b. Option a: 65000.35 Option b: 4900245 c Option a: 32500.20 Option b: 32000.50 d. Option a: 32165.59 Option b: 32009.50

Heba is expecting to get OMR 50000 at the end of 5 years. How much will be the value today if: Option a: The discount rate is 9.02% half yearly Option b: The discount rate is 128% quarterly Select one: a. Option a: 32000.25 Option b: 36000.55 b. Option a: 65000.35 Option b: 4900245 c Option a: 32500.20 Option b: 32000.50 d. Option a: 32165.59 Option b: 32009.50

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 22P

See similar textbooks

Similar questions

Define the stated (quoted) or nominal rate INOM as well as the periodic rate IPER. Will the future value be larger or smaller if we compound an initial amount more often than annually—for example, every 6 months, or semiannually—holding the stated interest rate constant? Why? What is the future value of $100 after 5 years under 12% annual compounding? Semiannual compounding? Quarterly compounding? Monthly compounding? Daily compounding? What is the effective annual rate (EAR or EFF%)? What is the EFF% for a nominal rate of 12%, compounded semiannually? Compounded quarterly? Compounded monthly? Compounded daily?
If you invest $15,000 today, how much will you have in (for further instructions on future value in Excel, see Appendix C): A. 20 years at 22% B. 12 years at 10% C. 5 years at 14% D. 2 years at 7%
You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years. Which table will help you determine the value of your account at the end of 12 years? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuity
Heba is expecting to get OMR 50000 at the end of 5 years. How much will be the value today if: Option a: The discount rate is 9.02% half yearly Option b: The discount rate is 12.8% quarterly Select one: a. Option a: 32500.20 Option b: 32000.50 b. Option a: 65000.35 Option b: 49002.45 c. Option a: 32000.25 Option b: 36000.55 d. Option a: 32165.59 Option b: 32009.50
Which of the following alternatives would you rather receive, assuming an interest rate of 8%per year, compounding annually?(You want to choose the option with the greatest monetary value) a. Receive 100 USD now b. Receive 120 USD in two years c. Receive 123 USD in three years d. Receive 125 USD in ten years
Assume you are offered a $20,000 annual payment, made quarterly (m =4). Payments begin in 10 years and last for 25 yrs. Payments grow at an annual rate of 4.0%. If you require 12% discounted quarterly (m=4) to make the investment, what is the maximum price you would be willing to pay today?
You are considering an investment in a 40-year security. The security will pay $25 a year at the end of each of the first three years. The security will then pay $30 a year at the end of each of the next 20 years. The discount rate is assumed to be 8 percent, and the current price (present value) of the security is $360.39. Given this information, what is the equal annual end-of-year payment to be received from year 24 through year 40
You have the option to receive $5,000 one year from now or $4,500 today. If the discount rate is 10%, which option should you choose to maximize your present value? Receive $5,000 one year from now Receive $4,500 today
You are comparing two investment options that each pay 6 percent interest, compounded annually. Both options will provide you with $12,000 of income. Option A pays $2,000 the first year followed by two annual payments of $5,000 each. Option B pays three annual payments of $4,000 each. Which one of the following statements is correct given these two investment options? Assume a positive discount rate. Which option has a higher present value? Show the calculations of the present value for both options.
Aetna is offering customers who invest $10,000 with them today a payment of $1,500 every 1.5 years in perpetuity. If the first payment will be made 1.5 years from today, what is the effective annual rate (EAR) of this investment opportunity?
If interest rate is 10%, the present value of $100,000 to be received one year from now if $90,910.Which two statements are correct?a) The present value of receiving $25,000 at the end of each year for the next four years is lessthan $90,910b) The present value of receiving $25,000 at the end of each year for the next four years is morethan $90,910c) The present value of receiving $50,000 at the end of each year for the next two years is less than$90,910d) The present value of receiving $50,000 at the end of each year for the next three years is lessthan $90,910e) The present value of receiving $50,000 at the end of each year for the next two years is morethan $90,910
An investment offers $8800 per year for 14 years with the first payment occuring one year from now. Assume the required returnis 12 percent. a. What is the value of investment today? b. What would the value be if the payment occured for 39 years? c. What would the value be if teh payments occured for 74 years? d. What would the value be if the payments occured forever?