Question
You are given three investment alternatives to analyze. The cash flows from these three investments are as follows: Investment End of Year A B C
You are given three investment alternatives to analyze. The cash flows from these three investments are as follows:
Investment | ||||||
End of Year | A | B | C | |||
---|---|---|---|---|---|---|
1 | $ | 16,000 | $ | 21,000 | ||
2 | 16,000 | |||||
3 | 16,000 | |||||
4 | 16,000 | |||||
5 | 16,000 | $ | 16,000 | |||
6 | 16,000 | 63,000 | ||||
7 | 16,000 | |||||
8 | 16,000 | |||||
9 | 16,000 | |||||
10 | 16,000 | 21,000 |
Assuming an annual discount rate of 21 percent, find the present value of each investment. Part 1 a.What is the present value of investment A at an annual discount rate of 21 percent? $ (Round to the nearest cent.) Part 2 b.What is the present value of investment B at an annual discount rate of 21 percent? $ (Round to the nearest cent.) Part 3 c.What is the present value of investment C at an annual discount rate of 21 percent? $ (Round to the nearest cent.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started