You will receive $6,800 three years from now. The discount rate is 10 percent. a. What is

Question:

You will receive $6,800 three years from now. The discount rate is 10 percent.

a. What is the value of your investment two years from now? Multiply $6,800 × (1/1.10) or divide by 1.10 (one year’s discount rate at 10 percent).

b. What is the value of your investment one year from now? Multiply your answer to part a by (1/1.10).

c. What is the value of your investment today? Multiply your answer to part b by (1/1.10).

d. Use the formula to find the present value of $6,800 received three years from now at 10 percent interest.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Foundations Of Financial Management

ISBN: 9781260013917

17th Edition

Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen

See More Books

Question Posted: Jun 03, 2022 10:33 PM

See More Questions

What is the share price when the discount rate is 13% and revenue growth is 15%? 36.70 35.47 36.83 39.70
Multiply or divide and, if possible, simplify. (a) r - s / r + s r2 - s2 / (r - s)2 (b) x2 - y2 / (x - y)2 1 / x + y (c) x2 + 2x - 35 / 2x3 - 3x2 4x3 - 93x / 7x - 49
Currently, the risk-free rate is 10 percent and the expected return on the market portfolio is 15 percent. Market analysts' return expectations for four stocks are listed here, together with each...
A strip of metal is originally 1.5 m long. It is stretched in three steps: first to a length of 1.75 m, then to 2.0 m, and finally to 3.0 m. Show that the total true strain is the sum of the true...
24, 13, 25, 39, 20, 23, 4, 23, 31, 18 Find the mean, median, range, standard deviation, and variance for the given data. Use the correct symbols.
Describe the functions of money.
What is the difference between lateral and diagonal communication?
Enron is a large energy trading company that allegedly committed massive fraud. Enrons primary method of committing fraud was to record liabilities in related partnerships, then known as special...
1. Prepare a flexible budget performance report for JulyJuly. 2. What was the effect on New BostonNew Boston's operating income of selling 2 comma 0002,000 units more than the static budget level of...
The ZooZoo company has decided to do some cost-cutting in the company due to some losses in the past year. To go ahead with the process they decided to find the replacements of employees with higher...
What is a deferred annuity?
1. This chapter explores the various sources of financing working capital needs. It also mentions General Electric Capital as a competitor to the banking community. This exercise examines General...
How Big a Bag Do I Need? On November 8,2008 , within a 30 -minute period, dozens of criminal "cashers" in the United States, Hong Kong, and Russia withdrew \$9M from approximately 130 ATMs at...
You are the cost accountant of an engineering concern which has three departments - preparation, machining and assembly. The budgeted direct labour hours for the workshops are 8,000, 12,000 and...
What alternative to fostering fun and enjoyment at work do you think might have worked for Zappos?
Using the techniques of dimensional analysis, and assuming that experimentation shows the dimensionless number to be 1, derive the following equation: E v = Job card two The results of an ultrasonic...
Given the historical cost of product Carla Vista is $13, the selling price of product Carla Vista is $15, costs to sell product Carla Vista are $3, the replacement cost for product Carla Vista is...
What causes of outliers in statistics and when I create a boxplot why do I not see the outliers. What steps are to take in creating a boxplot?
What information does a stock quotation provide about a stock?
Test your confidence in the following Project Decisions: SI. # Question 01 02 03 04 05 06 07 08 09 10 How many years did it take to construct the largest Egyptian Pyramid- Pyramid of Cheops? When was...
Shawn Pen & Pencil Sets Inc. has fixed costs of $80,000. Its product currently sells for $5 per unit and has variable costs of $2.50 per unit. Mr. Bic, the head of manufacturing, proposes to buy new...
Calloway Cab Company determines its break-even strictly on the basis of cash expenditures related to fixed costs. Its total fixed costs are $450,000, but 5 percent of this value is represented by...
Air Purifier Inc. computes its break-even point strictly on the basis of cash expenditures related to fixed costs. Its total fixed costs are $2,450,000, but 15 percent of this value is represented by...
Clayton received a $140,000 distribution from his 401(k) account this year. Assuming Clayton's marginal tax rate is 25 percent, what is the total amount of tax and penalty Shauna will be required to...
Mass LLp developed software that helps farmers to plow their fiels in a mannyue sthat precvents erosion and maimizes the effoctiveness of irrigation. Suny dale paid a licesnsing fee of $23000 for a...
Average Rate of Return The following data are accumulated by Lone Peak Inc. in evaluating two competing capital investment proposals: 3D Printer Truck Amount of investment $40,000 $50,000 Useful life...

You will receive $6,800 three years from now. The discount rate is 10 percent. a. What is

Question:

0 b 1 IN 2 $6,800 3

Step by Step Answer:

a b c d Calcu...View the full answer

Foundations Of Financial Management

Students also viewed these Business questions