Q19 Compute the present value of an $1,450 payment made in 10 years when the discount rate is 12 percent. (Do not round intermediate calculations. Round your answer to 2 decimal places.) PRESENT VALUE?

Q19 Compute the present value of an $1,450 payment made in 10 years when the discount rate is 12 percent. (Do not round intermediate calculations. Round your answer to 2 decimal places.) PRESENT VALUE?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA3: Time Value Of Money

Section: Chapter Questions

Problem 3CE

See similar textbooks

Related questions

Q: Compute the present value of an $1,200 payment made in 9 years when the discount rate is 11 percent.…

A: Future value (FV) = $1,200 Discount rate (r) = 0.11 Period (n) = 9 years Present value = ?

Q: q 13 A local furniture store is advertising a deal in which you buy a $6,000 living room set with…

A: Solution:- When an amount is invested somewhere, it earns interest on it. The amount initially…

Q: What is the price of a European put option on a non-dividend paying stock when the stock price is…

A: Stock Price is K69 The strike price is K70 The risk-free rate is 5% per annum Volatility is 35% per…

Q: &Your parents are planning to set a trust fund for you when you become 18 years old. They want you…

A: Interest rate The rate of return obtained from the investment or the interest rate the borrower pays…

Q: Scheduled payments of $1054, $789, and $508 are due in one-and-a-half years, four years, and six…

A: Here, Schedule payment (FV) $1,054.00 Time period (NPER) 1.50 Schedule payment (FV) $789.00…

Q: What is a FUTURES CONTRACT and what are its key components

A: Derivatives are those securities, the value of which depends on another security. There are few…

Q: There are two companies manufacturing drones. Company A manufactures mass market drones, while…

A: Given Cost of Goods Sold for Company A =1870,000 Total Inventory - Ram Material 120000+Work in…

Q: You are analyzing the U.S. equity market based upon the S&P Industrials Index and using the present…

A: We need to value the index using the cash flows and growth rate, using the discounted cash flow…

Q: Q 22 A mortgage broker is offering a 25-year $177,900 mortgage with a teaser rate. In the first two…

A: Solution: When an amount is borrowed, it can either be repaid as a lump sum payment or in…

Q: Compute the present value of $5,800 paid in two years using the following discount rates: 7 percent…

A: The present value (PV) is the current value of a future sum of money or stream of cash flows given a…

Q: Businesswire.com reported a shortage of inventory for new and used cars during the pandemic mainly…

A: Value of vehicle decreases with time but decrease depends upon the vehicle and method of…

Q: What annual interest rate would you need to earn if you wanted a $1,000 per month contribution to…

A: The Future Value of an Ordinary Annuity refers to the concept which gives out the compounded or…

Q: State of Economy Probability T-Bills Phillips Pay-up Rubber-Made…

A: Hi there! Thank you for the question. Question has multiple sub parts. As per company guidelines…

Q: If you buy a call option contract on Apple Inc, with the most heavily traded strike price today what…

A: Solution:- Derivative is a financial contract which derives its value from an underlying asset,…

Q: James settled into new job, financial security, decided to buy house, secure mortgage for $350,000…

A: A mortgage is a covered loan that is taken out for the reason of purchasing a property. The property…

Q: Compute the present value of a $6,000 deposit in year 3, and another $5,500 deposit at the end of…

A: Interest rate = 9% Cash flow in year 3 = $6,000 Cash flow in year 6 = $5,500 Present value = ?

Q: Recently, More Money 4U offered an annuity that pays 6.9% compounded monthly. If $1,038 is deposited…

A: Monthly deposit (C) = $1,038 Monthly interest rate (r) = 0.00575 (i.e. 0.069 / 12) Monthly period…

Q: 3. A court orders the following settlement: an annuity that will pay $150,000 at the end of eac next…

A: Solution:- When an equal amount is invested each period at end of period, it is known as ordinary…

Q: United Pigpen is considering a proposal to manufacture high-protein hog feed. The project would…

A: NPV method makes it easy for any company to take a decision about a particular project whether to…

Q: MacLoren Automotive. MacLoren Automotive manufactures British sports cars, a number of which are…

A: As per the given information: Invoice price of Car - £30,000Spot exchange rate - 1.6500Risk sharing…

Q: You are considering investing in a project which will last four years. You will invest £500,000 at…

A: Net present value is the difference between present value of cash inflows and outflows.

Q: Which of the following companies will have the highest capacity for debt assuming all other factors…

A: Lenders evaluate credit criteria to decide whether or not to approve a new loan. Although each…

Q: Which of the following is NOT a characteristic of preference share? Group of answer choices 1.…

A: The share capital of the firm includes preference share capital and equity share capital. The equity…

Q: For each of the following annuities, find the best matching description (given that each answer…

A: Contingent annuity: An annuity paid over a variable number of periods is known as a contingent…

Q: hand

A: a) Depreciation per year= (Book Value of the Asset-Salvage value)/no of years= (76000-0)/5= $15200…

Q: TOTAL INTEREST PAID. You are considering purchasing a home that requires $450,000 mortgage at 5.25%.…

A: Solution:- When an amount is borrowed, it can either be repaid as lump sum payment or in…

Q: .How can options, futures, and forward contracts be used to devise simple hedging strategies?…

A: Options, futures and forwards are derivative contracts that can be used to hedge the underlying…

Q: Which TVM formula could you use to calculate how much you would need to have saved at retirement to…

A: The time value of money refers to the concept which describes the money present today as more…

Q: A $20,000 loan obtained today is to be repaid in equal instalments over the next six years, starting…

A: An annuity is a stream of equal cash flows occurring at regular intervals of time. When cash flows…

Q: Determine the cost of a Payday loan. Homer Simpson had a rough few months. He fell behind on his…

A: As per the given information: Amount borrowed - $3000Fees charged by payday loan - $450 To…

Q: . Consider the following expected returns, risks, and correlations: Stock Expected Return…

Q: Cheap Money Bank offers your firm a discount interest loan with an interest rate of 9.85 percent for…

A: EAR The interest rate paid by an investor on an investment or loan is called the effective interest…

Q: Lincoln Manufacturing is considering starting a new line of business with the excess capacity it…

A: Given: Particulars Amount New machine cost $100,000 Interest rate 7% Years 6 Replaced in…

Q: A Freeze dryer is expected to cost RM19,000 two years from now and another RM12,000 four years from…

A: Concept. FV = PV ( 1+ r)n Where , FV = future value PV = present value r = interest rate n = time…

Q: Sunshine Smoothies Company (SSC) manufactures and distributes smoothies. It is considering the…

A: Net present value (NPV):The net present value is a technique used for making the investment…

Q: 1.MYG Corporation just issued some new preferred stock. The issue will pay an annual dividend of…

A: Annual dividend (d) = $2.50 Required return (r) = 0.05 Period till year 3 (t) = 3 years Value will…

Q: You are comparing Stock A to Stock B. Given the following information, what is the difference in the…

A: Expected rate is mean rate of return considering the different scenario and probability of different…

Q: The two most pressing demands for liquidity from a bank come from, first, customers withdrawing…

A: Liquidity in banking refers to the capacity or the ability of the banks to give cash to customers on…

Q: 9 A deposit of $720 earns interest rates of 8 percent in the first year and 11 percent in the…

A: Deposit amount (P) = $720 Interest rate in year 1 (r1) = 8% Interest rate in year 2 (r2) = 11%

Q: A foreign exchange trader with a U.S. bank took a speculative short position of £3,000,000 when the…

A: Profit/Loss arising from the trade = Total Pounds * ( Exchange rate per pound when long position…

Q: ABC limited company looking to invest in one of the Project cost that project is $50,000 and cash…

A: Profitibaility index = Present value of cash flows/Initial Investmnent IRR is the discount rate…

Q: Ms. Ria has the following loans running in her name: a) Personal loan of $8,500, current balance…

A: These are fairly standard time value of money (TVM) concept based questions. They can be solved…

Q: Consider an asset that costs $420,000 and is depreciated straight-line to zero over a 7-year…

A: No of years of economic life = 7,Salvage value = 0 So depreciation per year =(Book Value -Salvage…

Q: Company A has a beta of 0.9 , while Company B's beta is 1.4 . The market risk premium is 13.78 %,…

A: The Capital Asset Pricing Model (CAPM) illustrates the relationship between systematic risk, or the…

Q: Sandhill Co. has a capital structure, based on current market values, that consists of 25 percent…

A: Compute the after-tax cost of debt, using the equation as shown below: After tax cost of debt=Cost…

Q: Complete the following (If more than one discount, assume date of last discount): (Use Table 7.1)…

A: Trade discounts are provided to encourage early and timely payments. 2/10 indicates that if payments…

Q: Horace Burton made semi-annual deposits of $2,000 to Grant Bank, which pays 6% interest compounded…

A: Given: Particulars Amount Annual deposit(PMT) $2,000 Interest rate 6% Years 4 Period of…

Q: Fluctuations of a security's return that are due to market-wide news representing common risk is the…

A: 1) Idiosyncratic risk refers to the risk that negatively effects individual securities or a very…

Q: Consider a $4,400 deposit earning 9 percent interest per year for 9 years. What is the future…

A: Compound interest is the interest on savings calculated on both the initial principal and the…

Q: If a current mortgage payment of $4500 per month can be reduced to $3100 per month by refinancing,…

A: No. of months taken to recoup refinancing charges = refinancing charge / monthly payment When $ 4500…

Question

Q19

Compute the present value of an $1,450 payment made in 10 years when the discount rate is 12 percent. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

PRESENT VALUE?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Present Values Krista Kellman has an opportunity to purchase a government security that will pay $200,000 in 5 years. Required: Note: Round answers to two decimal places. 1. Calculate what Krista would pay for the security if the appropriate interest (discount) rate is 6% compounded annually. 2. Calculate what Krista would pay for the security if the appropriate interest (discount) rate is 10% compounded annually. 3. Calculate what Krista would pay for the security if the appropriate interest (discount) rate is 6% compounded semiannually.
ExerciseInstallment Notes ABC bank loans $250,000 to Yossarian to purchase a new home. Yossarian will repay the note in equal monthly payments over a period of 30 years. The interest rate is 12%. Required: If the monthly payment is $2,571.53, how much of the first payment is interest expense and how much is principal repayment? (Note: Round to the nearest cent.)
Present Value of an Annuity Ralph Benke wants to make 8 equal semiannual withdrawals of 8,000 from a fund that will earn interest at 11 % compounded semiannually. Required: How much would Ralph have to invest on: 1. January 1, 2019, if the first withdrawal is made on July 1, 2019 2. July 1, 2019, if the first withdrawal is made on July 1, 2019 3. January 1, 2019, if the first withdrawal is made on January 1, 2022
How much would you invest today in order to receive $30,000 in each of the following (for further Instructions on present value In Excel, see Appendix C): A. 10 years at 9% B. 8 years at 12% C. 14 years at 15% D. 19 years at 18%
Discount P6421 for 12.68 months at 8% simple interest. IN 2 decimal places. To discount the amount ? for ? years, means to solve for? applying the formula? = ?/(? + ??)