ontent area top Part 1 (Related to Checkpoint 6.6) (Present value of annuities and complex cash flows) You are given three investment alternatives to analyze. The cash flows from these three investments are as follows: Investment Alternatives End of Year A B C 1 $ 20,000 $ 20,000 2 20,000 3 20,000 4 20,000 5 20,000 $ 20,000 6 20,000 100,000 7 20,000 8 20,000 9 20,000 10 20,000 20,000
ontent area top Part 1 (Related to Checkpoint 6.6) (Present value of annuities and complex cash flows) You are given three investment alternatives to analyze. The cash flows from these three investments are as follows: Investment Alternatives End of Year A B C 1 $ 20,000 $ 20,000 2 20,000 3 20,000 4 20,000 5 20,000 $ 20,000 6 20,000 100,000 7 20,000 8 20,000 9 20,000 10 20,000 20,000
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter26: Capital Investment Analysis
Section: Chapter Questions
Problem 2MAD: Assume San Lucas Corporation in MAD 26-1 assigns the following probabilities to the estimated annual...
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Question content area top
Part 1
(Related to Checkpoint 6.6)
annuities and complex cash
(Present
value of flows)
You are given three investment alternatives to analyze. The cash flows from these three investments are as follows:|
Investment Alternatives
|
||||||
|
End of Year
|
A
|
|
B
|
|
C
|
|
|---|---|---|---|---|---|---|
|
1
|
$
|
20,000
|
|
|
$
|
20,000
|
|
2
|
|
20,000
|
|
|
|
|
|
3
|
|
20,000
|
|
|
|
|
|
4
|
|
20,000
|
|
|
|
|
|
5
|
|
20,000
|
$
|
20,000
|
|
|
|
6
|
|
|
|
20,000
|
|
100,000
|
|
7
|
|
|
|
20,000
|
|
|
|
8
|
|
|
|
20,000
|
|
|
|
9
|
|
|
|
20,000
|
|
|
|
10
|
|
|
|
20,000
|
|
20,000
|
(Click
on the icon
spreadsheet.)
Assuming an annual discount rate of
23
percent, find the present value of each investment.Question content area bottom
Part 1
a. What is the present value of investment A at an annual discount rate of
23
percent?$enter your response here
(Round to the nearest cent.)Part 2
b. What is the present value of investment B at an annual discount rate of
23
percent?$enter your response here
(Round to the nearest cent.)Part 3
c. What is the present value of investment C at an annual discount rate of
23
percent?$enter your response here
(Round to the nearest cent.)Expert Solution
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