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 | $ | 3,000 | $ | 1,000 | $ | 4,000 | |||
| 2 | 4,000 | 1,000 | 4,000 | ||||||
| 3 | 5,000 | 1,000 | (4,000) | ||||||
| 4 | (6,000) | 1,000 | (4,000) | ||||||
| 5 | 6,000 | 4,000 | 14,000 | ||||||
What is the present value of each of these three investments if the appropriate discount rate is 12
percent?
a.What is the present value of investment A at an annual discount rate of 12 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
Introduces Quantitative Finance
Authors: Paul Wilmott
2nd edition
470319585, 470319581, 978-0470319581
