Calculating the net present value received ten years

Reference no: EM13826590

Problem:

1. What is the present value (PV) of $80000 received ten years from now, assuming the interest rate is 5% per year, compounding annually?

A. $38422.76

B. $40000.00

C. 49113.06

D. 76000.00

2. An investor can invest $1000 at the start of a certain year, then $1000 at the end of that year and the next year in a certain business. The business guarantees that the investor will receive a payment at the end of the year in five years. What is the future value (FV) of that payment if the investor is to breakeven, given that the discount rate over those five years is 6% per year?

A. $2002

B. $2681

C. $3000

D. $3792

Summary of question:

These short questions belong to Finance. The 1st question is about calculating the net present value received ten years from now with an interest rate of 5% per year. The 2nd question is about calculating future value of an investment.

Reference no: EM13826590

Questions Cloud

Calculating the present value of an investment : What is the present value (PV) of an investment that will pay $4000 in one year's time and $400 every year after that, when the interest rate is 5% per year?

Discuss the theory of cost-benefit analysis : These problem belongs to Economics are about Cost Benefit Analysis, the steps involved in conducting Cost Benefit Analysis and the methods of calculating discount rate.

Which technique better aligns to your workplace : Compare and contrast project management and scenario planning techniques with particular emphasis on the implications of the techniques for the manager and the organization. Which technique better aligns to your workplace? Why

Discusses about possible way in which sales can be increased : discusses about the possible ways in which sales can be increased

Calculating the net present value received ten years : An investor can invest $1000 at the start of a certain year, then $1000 at the end of that year and the next year in a certain business. The business guarantees that the investor will receive a payment at the end of the year in five years. What is..

Best alternative for peter out of the following choices : However, the $10000 he has right now is needed for urgent repairs to his home, repairs that will cost at least $15000 if he delays them for a year. What is the best alternative for Peter out of the following choices?

Descriptive statistics of your complete portfolios : Both A and B are present in the above utility function. Present descriptive statistics of your complete portfolios. Critically compare your complete portfolios between both cases using graphs, equations, analytical findings and theories

Outline the key features of the travel cost method : The problem related to Economics deals with the key features of Travel Cost Method for valuing benefits. Travel Cost Method is mainly used to assess the benefit value associated with the ecosystem or any site for recreation.

Financial and managerial accounting : Identify some of the major differences between the fields of financial and managerial accounting. Compare and contrast these differences in terms of usefulness to managers for decision making. How do organizations cope with managers who have littl..

User Account

All Pages