Question
Investment X offers to pay you $6,300 per year for 9 years, whereas Investment Y offers to pay you $9,000 per year for 5 years.
| Investment X offers to pay you $6,300 per year for 9 years, whereas Investment Y offers to pay you $9,000 per year for 5 years. |
| Requirement 1: |
| (a) | If the discount rate is 8 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 8 percent? |
| (Click to select)Investment XInvestment Y |
| Requirement 2: |
| (a) | If the discount rate is 20 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 20 percent? |
| (Click to select)Investment YInvestment X |
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Military Finances Personal Money Management For Service Members Veterans And Their Families
Authors: Cheryl Lawhorne-Scott, Don Philpott
1st Edition
144222214X, 978-1442222144
