Homework: EXTRA CREDIT Chapter 12 Part 1 of 5 Question 1 > Score: 0 of 1 point Save a. b. Use the Present Value of $1 table to determine the present value of $1 received one year from now. Assume a 12% interest rate. Use the same table to find the present value of $1 received two years from now. Continue this process for a total of five years. (Click the icon to view the present value factor table.) (Click the icon to view the present value annuity factor table.) What is the total present value of the cash flows received over the five-year period? Could you characterize this stream of cash flows as an annuity? Why or why not? Use the Present Value of Annuity of $1 table to determine the present value of the same stream of cash flows. Compare your results to your answer to Part A. Explain your findings. c. d. ..... a. What is the total present value of the cash flows received over the five-year period? (Round all amounts to three decimal places.) Year Present value Year 1 Year 2 Year 3 Year 4 Year 5 Total present value Reference Present Value of $1 6% Periods Period 1 Period 2 Period 3 Period 4 Period 5 1% 0.990 0.980 0.971 0.961 0.951 2% 0.980 0.961 0.942 0.924 0.906 3% 0.971 0.943 0.915 0.888 0.863 4% 0.962 0.925 0.889 0.855 0.822 5% 0.952 0.907 0.864 0.823 0.784 0.943 0.890 0.840 0.792 0.747 8% 0.926 0.857 0.794 0.735 0.681 10% 0.909 0.826 0.751 0.683 0.621 12% 0.893 0.797 0.712 0.636 0.567 14% 0.877 0.769 0.675 0.592 0.519 16% 0.862 0.743 0.641 0.552 0.476 18% 0.847 0.718 0.609 0.516 0.437 20% 0.833 0.694 0.579 0.482 0.402 Period 6 0.942 Period 7 0.933 Period 8 0.923 Period 9 0.914 Period 10 0.905 0.888 0.871 0.853 0.837 0.820 0.837 0.813 0.789 0.766 0.744 0.790 0.760 0.731 0.703 0.676 0.746 0.711 0.677 0.645 0.614 0.705 0.665 0.627 0.592 0.558 0.630 0.583 0.540 0.500 0.463 0.564 0.513 0.467 0.424 0.386 0.507 0.452 0.404 0.361 0.322 0.456 0.400 0.351 0.308 0.270 0.410 0.354 0.305 0.263 0.227 0.370 0.314 0.266 0.225 0.191 0.335 0.279 0.233 0.194 0.162 Period 11 0.896 Period 12 0.887 Period 13 0.879 Period 14 0.870 Period 15 0.861 0.804 0.788 0.773 0.758 0.743 0.722 0.701 0.681 0.661 0.642 0.650 0.625 0.601 0.577 0.555 0.585 0.557 0.530 0.505 0.481 0.527 0.497 0.469 0.442 0.417 0.429 0.397 0.368 0.340 0.315 0.350 0.319 0.290 0.263 0.239 0.287 0.257 0.229 0.205 0.183 0.237 0.208 0.182 0.160 0.140 0.195 0.168 0.145 0.125 0.108 0.162 0.137 0.116 0.099 0.084 0.135 0.112 0.093 0.078 0.065 Period 20 0.820 Period 25 0.780 Period 30 0.742 Period 40 0.672 0.673 0.610 0.552 0.453 0.554 0.478 0.412 0.307 0.456 0.375 0.308 0.208 0.377 0.295 0.231 0.142 0.312 0.233 0.174 0.097 0.215 0.146 0.099 0.046 0.149 0.092 0.057 0.022 0.104 0.059 0.033 0.011 0.073 0.038 0.020 0.005 0.051 0.037 0.024 0.016 0.012 0.007 0.003 0.001 0.026 0.010 0.004 0.001 Present Value of Annuity of $1 Periods Period 1 Period 2 Period 3 Period 4 Period 5 1% 0.990 1.970 2.941 3.902 4.853 2% 3% 4% 5% 6% 0.980 0.971 0.962 0.952 0.943 1.942 1.913 1.886 1.859 1.833 2.884 2.829 2.775 2.723 2.673 3.808 3.717 3.630 3.546 3.465 4.713 4.580 4.452 4.329 4.212 8% 10% 12% 0.926 0.909 0.893 1.783 1.736 1.690 2.577 2.487 2.402 3.312 3.170 3.037 3.993 3.791 3.605 14% 0.877 1.647 2.322 2.914 3.433 16% 0.862 1.605 2.246 2.798 3.274 18% 0.847 1.566 2.174 2.690 3.127 20% 0.833 1.528 2.106 2.589 2.991 Period 6 Period 7 Period 8 Period 9 Period 10 5.795 6.728 7.652 8.566 9.471 5.601 5.417 5.242 5.076 4.917 6.472 6.230 6.002 5.786 5.582 7.325 | 7.020 6.733 6.463 6.210 8.1627.786 7.435 7.108 6.802 8.983 8.530 8.111 7.722 7.360 4.623 4.355 4.111 5.206 4.868 4.564 5.747 5.335 4.968 6.247 5.759 5.328 6.710 6.145 5.650 3.889 4.288 4.639 4.946 5.216 3.685 4.039 4.344 4.607 4.833 3.498 3.812 4.078 4.303 4.494 3.326 3.605 3.837 4.031 4.192 Period 11 | 10.368 9.787 9.2538.760 8.306 7.887 Period 12 11.255 10.575 9.954 9.385 8.863 8.384 Period 13 12.134 11.348 10.635 9.986 9.394 8.853 Period 14 | 13.004 12.106 11.296 | 10.563 9.899 9.295 Period 15 13.865 12.849 11.938 11.118 10.380 9.712 7.139 6.495 5.938 7.536 6.814 6.194 7.904 7.103 6.424 8.244 | 7.3676.628 8.559 7.6066.811 5.453 5.660 5.842 6.002 6.142 5.029 5.197 5.342 5.468 5.575 4.656 4.793 4.910 5.008 5.092 4.327 4.439 4.533 4.611 4.675 Period 2018.046 16.351 14.877 13.590 12.462 11.470 9.818 8.514 7.469 Period 25 22.023 19.523 17.413 15.622 14.094 12.783 10.675 9.077 7.843 Period 30 25.808 22.396 19.600 17.292 15.372 13.765 11.258 9.4278.055 Period 40 32.835 27.355 23.115 19.793 17.159 15.046 11.925 9.779 8.244 6.623 6.873 7.003 7.105 5.929 6.097 6.177 6.233 5.353 5.467 5.517 5.548 4.870 4.948 4.979 4.997