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In 2 years from now, you plan to deposit $20,000 into a bank account that pays 6% per year. You plan to withdraw all of
In 2 years from now, you plan to deposit $20,000 into a bank account that pays 6% per year. You plan to withdraw all of the money and close the bank account in 5 years from now. The amount of money you will be able to withdraw is: 0 $22,472.00 $26,764.51 $23,820.32 $21,200.00 1 point You have won a lottery which offers the following four alternatives to collect your winnings: (1) You can either receive a one time payment of $132 in exactly two years from now. (2) Or you can receive a one time payment of $160 in exactly five years from now. (3) Or you can receive a one time payment of $200 in exactly eight years from now. (4) Or you can receive a one time payment of $220 in exactly ten years from now. The interest rate is 6%. What would be your preference order among these alternatives is i.e. which of these alternatives would you prefer the most and which one would you prefer the least: 4, 3, 2, 1 3, 4, 2, 1 3, 1, 2,4 1, 2, 3, 4 You are asked to choose between two investment choices: Investment A and Investment B. Both investments have the same future cash flow. For investment A the appropriate market interest rate (discount rate) is 4% and for investment B the market interest rate (discount rate) is 5%. Which of the following is true: O No comparison can be made as we need information on future cash flow Investment B is better than Investment A Investment A is better than Investment B Investment A is as good as Investment B 1 point A project you are considering is expected to provide benefits worth $225,000 in one year. If the rate of interest is 8%, then the value of the benefits of this project today are: 0 $225,000 $190,333 O $208,333 $243,000
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