Question
5.1: Investment X offers to pay you $4,900 per year for 9 years, whereas Investment Y offers to pay you $6,500 per year for 5
5.1: Investment X offers to pay you $4,900 per year for 9 years, whereas Investment Y offers to pay you $6,500 per year for 5 years.
| Requirement 1: |
| (a) | If the discount rate is 5 percent, what is the present value of these cash flows? (Enter rounded answers as directed, but do not use rounded numbers in intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) |
| Present value | |
| Investment X | $ |
| Investment Y | $ |
| | |
| (b) | Which of these cash flow streams has the higher present value at 5 percent? |
| Requirement 2: |
| (a) | If the discount rate is 23 percent, what is the present value of these cash flows? (Enter rounded answers as directed, but do not use rounded numbers in intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).) |
| Present value | |
| Investment X | $ |
| Investment Y | $ |
| | |
| (b) | Which of these cash flow streams has the higher present value at 23 percent? |
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Port Infrastructure Finance
Authors: Hilde Meersman, Eddy Van De Voorde, Thierry Vanelslander
1st Edition
0415720060, 978-0415720069
