Question
Hi need help with the following finance question below. 5-2 Present Value and Multiple Cash Flows [LO 1] Investment X offers to pay you $7,700
Hi need help with the following finance question below.
5-2 Present Value and Multiple Cash Flows [LO 1]
| Investment X offers to pay you $7,700 per year for 9 years, whereas Investment Y offers to pay you $10,600 per year for 5 years. |
| Requirement 1: |
| (a) | If the discount rate is 7 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 7 percent? |
| Investment X | |
| Investment Y |
| Requirement 2: |
| (a) | If the discount rate is 21 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 | $ |
|
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Financial Institutions Management A Risk Management Approach
Authors: Anthony Saunders, Marcia Millon Cornett
9th edition
1259717771, 1259717772, 9781260048186, 1260048187, 978-1259717772
