Present Value Problems

Problem #1

1. Company A plans to invest in a 5-year bond that requires an outlay of Php100,000 and will earn Php500,000 after 5 years and compounded semi-annually. The annual prevailing interest rate of this kind of bond is 12%. What is the net present value of the investment? (Round your factor in 3 decimal places)

Problem #2

2. Company B plans to invest in a 5-year bond that requires an outlay of Php100,000 and will earn Php200,000 over 5 years, compounded annually. The annual prevailing interest rate of this kind of bond is 10%. What is the net present value of the investment? (Round your factor in 3 decimal places)

Problem #3

3. On January 1, 20x0, Company C plans to invest in a 10-year investment that requires an outlay of Php150,000 and will earn Php30,000 for 10years starting January 1, 20x0, compounded annually. The annual prevailing interest rate of this kind of bond is 10%. What is the net present value of the investment? (Round your factor in 3 decimal places)

Problem #4

4. On January 1, 20x0, Company D plans to invest in a 10-year investment that requires an outlay of Php20,000 annually for 5 years starting December 31, 20x0 and will earn Php200,000 after 10years upon start of payment, compounded annually. The annual prevailing interest rate of this kind of bond is 8%. What is the net present value of the investment? (Round your factor in 3 decimal places)

Problem #5

5. On January 1, 20x0, Company E plans to invest in a 10-year investment that requires an outlay of Php200,000 on January 1, 20x0 and will earn Php150,000 on the 5th year and another Php150,000 upon maturity, compounded annually. The annual prevailing interest rate of this kind of bond is 11%. What is the net present value of the investment? (Round your factor in 3 decimal places)