Maurice Tutor

(5)

$15/per page/Negotiable

About Maurice Tutor

Levels Tought:
Elementary,Middle School,High School,College,University,PHD

Expertise:
Algebra,Applied Sciences See all
Algebra,Applied Sciences,Biology,Calculus,Chemistry,Economics,English,Essay writing,Geography,Geology,Health & Medical,Physics,Science Hide all
Teaching Since: May 2017
Last Sign in: 401 Weeks Ago, 1 Day Ago
Questions Answered: 66690
Tutorials Posted: 66688

Education

  • MCS,PHD
    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

Experience

  • Professor
    Phoniex University
    Oct-2001 - Nov-2016

Category > Accounting Posted 24 Aug 2017 My Price 11.00

Basic Present Value Concepts

 

EXERCISE 13A–2 Basic Present Value Concepts [LO7]

Consider each of the following situations independently.

1.               Annual cash inflows from two competing investment opportunities are given below. Each investment opportunity will require the same initial investment. Compute the present value of the cash inflows for each investment using a 20% discount rate:

 

 

Year

X

 

Y

1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 1,000

 

$ 4,000

2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,000

 

3,000

3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,000

 

2,000

4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  .

   4,000

 

   1,000

 

$10,000

 

$10,000

 

2.               At the end of three years, when you graduate from college, your parents have promised to give you a used car that will cost $12,000. What lump sum must they invest now to have the $12,000 at the end of three years if they can invest money at

a.    6%?

b.    10%?

3.               Mark has just won the grand prize on the Hoot ’n’ Holler quiz show. He has a choice between (a) receiving $500,000 immediately and (b) receiving $60,000 per year at the end of the year for eight years, plus a lump sum of $200,000 at the end of the eight-year period. If Mark can get a return of 10% on his investments, which option would you rec- ommend that he accept? Use present value analysis, and show all computations.

4.               You have just learned that you are a beneficiary in the will of your late Aunt Susan. The execu- tor of her estate has given you three options as to how you may receive your inheritance:

a.       You may receive $50,000 immediately.

b.       You may receive $75,000 at the end of six years.

c.       You may receive $12,000 at the end of each year for six years (a total of $72,000). If you can invest money at a 12% return, which option would you prefer?

 


 

 

 

Answers

Maurice Tutor
(5)
Status NEW Posted 24 Aug 2017 04:08 PM My Price 11.00

Hel-----------lo -----------Sir-----------/Ma-----------dam-----------Tha-----------nk -----------You----------- fo-----------r u-----------sin-----------g o-----------ur -----------web-----------sit-----------e a-----------nd -----------and----------- ac-----------qui-----------sit-----------ion----------- of----------- my----------- po-----------ste-----------d s-----------olu-----------tio-----------n.P-----------lea-----------se -----------pin-----------g m-----------e o-----------n c-----------hat----------- I -----------am -----------onl-----------ine----------- or----------- in-----------box----------- me----------- a -----------mes-----------sag-----------e I----------- wi-----------ll

Not Rated(0)