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Please answer the three questions. You receive $25,000 now that you invest for 6% for 10 years. At the end of that 10 year timeframe,
Please answer the three questions.
You receive $25,000 now that you invest for 6% for 10 years. At the end of that 10 year timeframe, you take whatever the pot is worth after the end of the 10 years and invest that into a different investment instrument that you will earn 9% annually for the next 5 years. How much will the original $25,000 be worth at the end of the 15 years? I do not want to know the gain; rather, I want to know how much the pot will be worth. $70,542 $69,524 $68,264 $68,886 Bill Wilson's cousin, Luigi, also received a football contract offer with the following terms: Signing Bonus: $500,000 $500,000 at the end of year one $600,000 at the end of year two $750,000 at the end of year three $3,000,000 at the end of each year 4 - 10. Luigi assumes he can earn 3% annually over the life of the contract. What is the Present Value of this football contract> $19,321,641 $18,842,125 $18,821,641 $19,342,125 Assume you have just completed the recording of a new song for which the recording company will pay you $19,500 each and every year for the next 20 years. Your required Rate of Return as a rational economic investor equals 8%. But, because the recording studio and you both want to move in separate directions, they're willing to offer you $175,000 as a final "go away...get lost..." What is the Present Value of the best alternative - take the deal now for $175,000 or wait and take the annual payments over the next 20 years? Wait and realize higher PF of 185,211. Wait and realize higher PV of $192,345 Wait and realize higher PV of $191,454 Take now the $175,000Step by Step Solution
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