Question
Problem 5-2 Present Value and Multiple Cash Flows [LO 1] Investment X offers to pay you $5,900 per year for 9 years, whereas Investment Y
Problem 5-2 Present Value and Multiple Cash Flows [LO 1]
Investment X offers to pay you $5,900 per year for 9 years, whereas Investment Y offers to pay you $8,200 per year for 5 years.
Requirement 1: (a) If the discount rate is 6 percent, what is the present value of these cash flows? (Enter rounded answers as directed, but do not use rounded numbers in intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)
Present value
1) Investment X $
2) Investment Y $
(b) Which of these cash flow streams has the higher present value at 6 percent?
Requirement 2: (a) If the discount rate is 22 percent, what is the present value of these cash flows? (Enter rounded answers as directed, but do not use rounded numbers in intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)
Present value
1)Investment X $
2) Investment Y $
(b) Which of these cash flow streams has the higher present value at 22 percent?
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