Please use the following information for question 11 to 13.

You have bought a house today at the price of $500,000. In the next two years, you will

get a rent of $50,000 each year. In year 3, there is no rent income but you will sell the house at

the price of $800,000. Suppose the discount rate (interest rate) is always 10% each year.

11. What is the present value at time zero for the rent income at year 2?

$50,000

$41,322

$42,322

$43,322

None of the above

12. What is the present value at time zero for the rent income at year 1?

$50,000

$41,322

$45,455

$42,455

None of the above

13. What is the net present value at time zero (NPV0) for this project?

0

$187,829

$128,829

$138,829

None of the above

10 years from now, you will receive a payment, which is 2 times the present value of this

payment. If the discount rate is the same for every year, what is the annual discount rate ?

8.10%

8.18%

7.18%

4.14%

C

You will receive a payment, which is 2 times the present value of this payment. If the discount rate is 7% every year, which year will you receive this payment?

7.89 years

8.67 years

9.35 years

10.24 years

none of the above

D

Please use the following information for question 11 to 13.

You have bought a house today at the price of $500,000. In the next two years, you will

get a rent of $50,000 each year. In year 3, there is no rent income but you will sell the house at

the price of $800,000. Suppose the discount rate (interest rate) is always 10% each year.

11. What is the present value at time zero for the rent income at year 2?

$50,000

$41,322

$42,322

$43,322

None of the above

12. What is the present value at time zero for the rent income at year 1?

$50,000

$41,322

$45,455

$42,455

None of the above

13. What is the net present value at time zero (NPV0) for this project?

0

$187,829

$128,829

$138,829

None of the above

10 years from now, you will receive a payment, which is 2 times the present value of this

payment. If the discount rate is the same for every year, what is the annual discount rate ?

8.10%

8.18%

7.18%

4.14

You will receive a payment, which is 2 times the present value of this payment. If the discount rate is 7% every year, which year will you receive this payment?

7.89 years

8.67 years

9.35 years

10.24 years

Need help with these questioning using the present value fomula. in a finance management class