#4

Part 4 The Capital Budgeting Process 4. 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 X (1/1.10) or divide by 1.10 (one year's discount rate at 10 percent). b. What is the value of your iaveuitment ora year from now? Multiply your answer to part a by (1/1.10). c. What is the value of your invesanent today? Multiply your answer to part b d. Use the formula PV FVX to find the present value of $6,600 received three years from now at 10 percent interest. If you invest $9,000 today, how much will you have a. 5. b. c. d. In 2 years at 9 percent? In 7 years at 12 percent? In 25 years at 14 percent? In 25 years at 14 percent (compounded semiannually)