(Present value of annuities and complex cash flows)

You are given three investment alternatives to analyze. The cash flows from these three investments are as follows:

Investment Alternatives
End of Year		A		B		C
1	$	10,000			$	10,000
2		10,000
3		10,000
4		10,000
5		10,000	$	10,000
6				10,000		50,000
7				10,000
8				10,000
9				10,000
10				10,000		10,000

(Click on the icon in order to copy its contents into a

spreadsheet.) Assuming an annual discount rate of 18

percent, find the present value of each investment.

Question content area bottom

Part 1

a.What is the present value of investment A at an annual discount rate of 18 percent?