Suppose that $1000 is invested now, $2000 is invest two years from now, and $3000 is invested four years from now, all at 4% per year, compounded continuously. What will be the total amount 10 years from now?

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: Suppose that  in  3  years  the  company  must  disburse  $500,000  to  invest  in  another project…

A: Formula: Future Value Annuity=Investment(P)×1+rateinterval-1rate

Q: How many years will it take $540 to grow to $11,515.44 if it is invested at 12 percent compounded…

A: In the above question we need to compute the number of years it will take to grow $540 to $11515.44…

Q: 1. A company will have to spend $300000 on new plant in two years from now. Currently investment…

A: Present Value = $300,000 Time Period = 2 Years Interest Rate = 10%

Q: If ​$8000 is invested at 6​% compounded​ continuously, what is the amount after 6 ​years?

A: Investment=$8000Interest rate=6%Number of years=6

Q: Your firm has taken on cost saving measures that will provide a benefit of $11,000 in the first…

A: First year benefits (C) = $11,000 Annual growth rate (g) = - 0.03 (-3%) Interest rate (r) = 0.09…

Q: Using the tables provided, if an investment is made now for $19,200 that will generate a cash inflow…

A: Given, The investment is $19,200 Cash inflow is $6,400. Rate is 10%

Q: Assume you have $100,000 now. If you get an average annual return of 4%, how many years will it take…

A: Future Value = Present Value * (1+r)^nWhere,r = rate of interest per period i.e. 4%n = no. of…

Q: Question: A project pays $2000 today, costs $5000 a year from now, and pays $12, 500 in two years.…

A: Here, Cash inflow in year 0 is $2,000 Cash Outflow in Year 1 is $5,000 Cash Inflow in Year 2 is…

Q: If an investment project costs a firm £200 and yields a stream of profits of £100 per year for the…

A: Internal rate of return(IRR) is one of the techniques of capital budgeting that take into…

Q: If you invested $10,000 for ten years at 6% p.a. compounded monthly, how much in total would you…

A: Compound interest is calculated by multiplying the original loan amount, or the principle, by one…

Q: If you invested $50,000 at one point in time and received back $80,000 ten years later, what annual…

A: As we have the beginning value, ending value and time period, we can use Compounded Annual Growth…

Q: The LMN Corporation is considering an investment that will cost $80,000 and have a useful life of 4…

A: Payback periods is the time period required by a project to pay back the amount invested in it by…

Q: A company is expected to result 2900$ savings first year then increase by 200$ annually, if the rate…

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

Q: Two years ago. XYZ invested $13,800. In 3 years from today, he expects to have $26,200. If XYZ…

A: Calculate the implied interest rate, Use the same interest rate to calculate the years  Using excel…

Q: Equipment that costs $15,000 and generates a $5,000 annual return would appear to "pay back" on the…

A: Given: Investment =$15000Annual return =$5000Inflation rate =30%

Q: How many years will it take $2,000 to grow to $3,600 if it is invested at 3.25% compounded…

A: The concept of the time value of money states that the current worth of money is more than its value…

Q: Use the graph below to answer the following questions.   What is the approximate final value of…

A: Future value = Present value * ( 1 + Interest rate )time

Q: A company is considering an investment expected to yield $70,000 after six years. If this company…

A: Present value: It can be defined as today’s value of the sum of money that will be received by the…

Q: If u make an investment of $3500 and the investment loses a continuous 5% each year, what will the…

A: Given information: Present value of investment is $3,500 Investment loses a continuous 5% each year…

Q: You are evaluating a project that will cost $500,000 but is expected to produce cash flows of…

A: To calculate the payback period we will use the below formula   Payback period = Cost of…

Q: Given the situation, choose the correct formula to solve the problem: How long (in years) would…

A: future value is the future worth of a cash flow at a certain rate and time period. Future value =…

Q: About how many years would it take for your investment to grow threefold if it were invested at an…

A: In the given problem we require to calculate the number of years that will make the investment three…

Q: The value of an investment comes from its cash flows. Let’s say you are intent on receiving $45,000…

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

Q: About how many years would it take for your investment to grow fourfold if it were invested at an…

A: We require to calculate the time period i.e. number of years that will make out investment four fold…

Q: The value of business, currently priced at 100000 Ria is expected to increase by 20% a year. After…

A: Using excel FV and NPER function

Q: A company expects to have FCF of $300 in 1 year, which is expectedto grow at a constant rate of 3%…

A: The current worth of the free cash flows of a company is term as the value of operations of a…

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: Assume that an investment, with a single initial cost of $1,000 and a yield of $50 monthly for 10…

A: IRR is one of the toll for capital budgeting where, NPV of cash flow is zero. The best way to solve…

Q: Assuming a 9 percent return on investment, how many years will it take $60,000 to grow to $900,000?

A: The NPER function or concept is used to determine the time required for an investment to grow to a…

Q: The expected profits from a $165,000 investment are $55,000 in Year 1, $80,000 in Year 2, and…

A: Year Cash flows 0 -165000 1 55000 2 80000 3 120000

Q: If you have an investment of $1000 that grows at a rate of 6%, compounded annually, how much will it…

A: The Future Value of this investment is computed to find the worth of the investment after 10 years.…

Q: About how many years would it take for your investment to grow sixfold if it were invested at an APR…

A: In the given question we require to calculate the the number of years that make the investment six…

Q: Would you rather have $7,500 today or at the end of 20 years after it has been invested at 15%?

A: According to the time value of money concept, the value of a certain amount of money in the future…

Q: If you wish to have $85000 now how much should you have invested 15 years ago?

A: Let the required investment amount be A to obtain $85,000 after 15 years. Now, compute the interest…

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: Machine X will produce cost savings of $6,000 per year for four years; machine Y will produce cost…

A: Calculate the present value for both machines as follows:

Q: If you invest $10,000 at 8.125% interest compounded daily, how long will it take for you to…

A: Present value =$10,000 Future value = $15,000 Interest rate = 8.125% compounded daily So, daily…

Q: How many years will it take for ​$500 to grow to ​$1039.50 if​ it's invested at 5 percent…

A: FV or Future value = PV or present value * (1+interest rate)^n To solve for n we can use the NPER…

Q: For a major plant expansion project, a company wants to have $63 million 5 years from now If the…

A: Solution: Money is invested somewhere to earn interest on it. The amount initially deposited in…

Q: A DSL company has made an equipment investment of $40 million with the expectation that it will be…

A: Given information: Equipment investment is $40,000,000 Number of years is 10 Rate of return is 12%…

Q: At what rate would $1,700 have to be invested to grow to $20,692.71 in 29 years?

A: Details given are : Present value = $1700 Future value = $20692.71 Time period = 29 years We require…

Q: What would be the rate of return (IRR) on a project that had an  initial cost of $100,000 today and…

A: Cash flows are the cash generated from the operation of the business organisation. In other words,…

Q: You are considering an investment product that is expected to generate an annual cash flow of $2,000…

A: Annual cashflow (A) = $2000 starting after 3 years Cost of investment in year 0 (C0) = $10000 C1 =…

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.