You plan to invest $1,000 per year in a diversified investment fund that you expect will earn a rate of return of 8% per year (its cost of capital). a. If you invest for 10 years (a total of $10,000), starting one year from today, what is the present value today of your total investment? Show your work. b. What will be the expected future value of your total investment at the end of the 10 years? Show your work.

You plan to invest $1,000 per year in a diversified investment fund that you expect will earn a rate of return of 8% per year (its cost of capital). a. If you invest for 10 years (a total of $10,000), starting one year from today, what is the present value today of your total investment? Show your work. b. What will be the expected future value of your total investment at the end of the 10 years? Show your work.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 13EB: Conestoga Plumbing plans to invest in a new pump that is anticipated to provide annual savings for...

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