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The graph below shows present values and future values of single payments for various interest rates over six periods. Answer the following questions. Required: Today
The graph below shows present values and future values of single payments for various interest rates over six periods. Answer the following questions.
Required:
Today (n = 0), a company invests $1,000 and expects that investment to grow 10% each period for the next six periods (n = 6). What is the investments expected future value? | not attempted | ||
2. | A company expects to receive $1,772 in six periods. What is that amounts present value, assuming the companys other current investment opportunities are expected to earn 10% per period? | not attempted | |
3. | The difference between the present value and future value for a given rate represents: | not attempted | |
4. | The difference between present value and future value: | not attempted | |
5. | The difference between present value and future value: | not attempted | |
6. | A company has the choice of receiving $1,000 today from a customer or receiving $1,340 in six periods. Which option does the company prefer, assuming the companys other current investment opportunities are expected to earn 5% per period? | not attempted | |
7. | A company has the choice of receiving $1,000 today from a customer or receiving $1,200 in six periods. Which option does the company prefer, assuming the companys other current investment opportunities are expected to earn 2% per period? |
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