Question
24. Timmy wants to buy a scooter to celebrate turning ten. He turned 6 years old today. How much should he invest today if the
24. Timmy wants to buy a scooter to celebrate turning ten. He turned 6 years old today. How much should he invest today if the scooter will cost $200 and he can get 5% interest from the bank every year on his investment?
25. Sarah is going to need $1,000 6 years from now. If the appropriate discount rate is 5%, what is the value of that $1,000 today?
26 What is the net present value of the following cash flows if a company uses 12% as its required rate of return? Purchase equipment for $200,000 today; receive cash inflows of $40,000 for the next 5 years; sell the equipment for $50,000 at the end of the fifth year.
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