Answered step by step
Verified Expert Solution
Question
1 Approved Answer
all four questions i will give points and grade quick. You are given two choices of investments, Investment A and Investment B. Both investments have
all four questions i will give points and grade quick.
You are given two choices of investments, Investment A and Investment B. Both investments have the same future cash flows. Investment A has a discount rate of 4%, and Investment B has a discount rate of 5%. Which of the following is true? The present value of cash flows in Investment A is equal to the present value of cash flows in Investment B. The present value of cash flows in Investment A is higher than the present value of cash flows in Investment B. The present value of cash flows in Investment A is lower than the present value of cash flows in Investment B. No comparison can be made - we need to know the cash flows to calculate the present value. Assume that your parents wanted to have $160,000 saved for college by your 18th birthday and they started saving on your first birthday. They saved the same amount each year on your birthday and earned 8.0% per year on their investments. How much would they have to save each year to reach their goal? If they think you will take five years instead of four to graduate and decide to have $200,000 saved just in case, how much would they have to save each year to reach their new goal? How much would they have to save each year to reach their goal? To reach the goal of $160,000, the amount they have to save each year is $ If they think you will take five years instead of four to graduate and decide to have $200,000 saved just in case, how much would they have to save each year to reach their new goal? To reach the goal of $200,000, the amount they have to save each year is $ . You have an opportunity to invest $100,000 now in return for $80,400 in one year and $30,400 in two years. If your cost of capital is 8.5%, what is the NPV of this investment? The NPV will be $ . Ally wishes to leave a provision in her will that $5,000 will be paid annually in perpetuity to a local charity. How much must she provide in her will for this perpetuity if the interest rate is 10%? $30,000 $50,000 $25,000 $40,000Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started