Question
Please Show work! A) What if you know you need $2,000 one year from now and $2,000 more two years from now, and $2000 more
Please Show work!
A)
What if you know you need $2,000 one year from now and $2,000 more two years from now, and $2000 more 3 years from now. If you can earn 6% on your money, how much do you need today? Whats the PV of the three cashflows?
B) You are offered an investment that will pay 3 installments of $5,000 each. The first $5,000 will pay out in 4 years, and the remaining 2 installments will pay out in year 5 and 6 respectively. What is the present value at 10%?
C) Examining an asset that is set to pay $500 at the end of each of the next three years. This is a $500, 3-year annuity. How much would we pay for it if we want to earn 10% on our money?
N = 3 I/Yr = 10 PV = ?? PMT = 500 PV = $1,243.33
D) TLC Inc. pays a $2,000 annual dividend that yields 7% and the dividend grows by 2% per year. How much would you pay for the preferred stock?
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