# 9 Problems Your grandfather has offered you a choice of one of the three following alternatives....

rate positively ..

 Ans a_ 1) Present value = 13,500.00 Ans a_ 2) Computation of present value year Cash flow PVIF @ 9% present value 1 6500 0.9174312 5,963.30 2 6500 0.84168 5,470.92 3 6500 0.7721835 5,019.19 4 6500 0.7084252 4,604.76 5 6500 0.6499314 4,224.55 6 6500 0.5962673 3,875.74 7 6500 0.5470342 3,555.72 8 6500 0.5018663 3,262.13 9 6500 0.4604278 2,992.78 38,969.10 PV = 38,969.10 Ans 1_ 3) present value = 91000/(1.09)^9 41898.93 Ans a) 2 \$91000 received at the end of nine year Ans b_ 1) Present value = 13,500.00 Ans b_ 2) Computation of present value year Cash flow PVIF @ 10% present value 1 6500 0.9090909 5,909.09 2 6500 0.8264463 5,371.90 3 6500 0.7513148 4,883.55 4 6500 0.6830135 4,439.59 5 6500 0.6209213 4,035.99 6 6500 0.5644739 3,669.08 7 6500 0.5131581 3,335.53 8 6500 0.4665074 3,032.30 9 6500 0.4240976 2,756.63 37,433.65 PV = 37,433.65 Ans b_ 3) present value = 91000/(1.1)^9 38592.88

#### Earn Coin

Coins can be redeemed for fabulous gifts.

Similar Homework Help Questions
• ### Your grandfather has offered you a choice of one of the three following alternatives: \$7,500 now:...

Your grandfather has offered you a choice of one of the three following alternatives: \$7,500 now: \$2.200 a year for nine years; or \$31,000 at the formula and financial calculator methods. e years. Use Appendix 8 and Appendix D for an approximate answer, but calculate your final answer using a-1. Assuming you coul calculations. Round your final answers to 2 decimal places.) d earn 10 percent annually, compute the present value of each alternative: (Do not round intermediate Present Value...

• ### Your grandfather has offered you a choice of one of the three following alternatives: \$10,500 now...

Your grandfather has offered you a choice of one of the three following alternatives: \$10,500 now \$5,000 a year for nine years or \$61,000 at the end of nine years. Use Appendix Band Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods. 0-1. Assuming you could eam 7 percent annually, compute the present value of each alternative: (Do not round intermediate calculations. Round your final answers to 2 decimal places.) Present...

• ### Your grandfather has offered you a choice of one of the three following alternatives:

Your grandfather has offered you a choice of one of the three following alternatives: \$5,500 now; \$1,250 a year for five years; or \$17,000 at the end of five years. Use Appendix B and Appendix D for an approximate answer, but calculate your final answer uYour grandfather has offered you a choice of one of the three following alternatives: \$5,500 now; \$1,250 a year for five years; or \$17,000 at the end of five years. Use Appendix B and Appendix D for an approximate...

• ### Your grandfather has offered you a choice of one of the three following alternatives: \$5,500 now; \$1,250 a year for five years; or \$17,000 at the end of five years. Use Appendix B and Appendix D for an approximate answer, but calculate your final answer u

Your grandfather has offered you a choice of one of the three following alternatives: \$5,500 now; \$1,250 a year for five years; or \$17,000 at the end of five years. Use Appendix B and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods.a-1. Assuming you could earn 6 percent annually, compute the present value of each alternative: (Do not round intermediate calculations. Round your final answers to 2 decimal places.)1250 ->    Present value = _________  a-2. If you...

• ### 1. (15 points) Your grandfather has offered you a choice of one of the theefollowing alternatives:...

1. (15 points) Your grandfather has offered you a choice of one of the theefollowing alternatives: \$4500 now; \$1000 at the beginning of each period for six years, or \$8000 at the end of six years. Assuming you could earn 12% annually. Required: (1) Calculate the Present Value of each choice (2) State which alternative should you choose?

• ### Your rich godfather has offered you a choice of one of the three following alternatives: \$10,000 now; \$2,000 a year for eight years; or \$24,000 at the end of eight years

Your rich godfather has offered you a choice of one of the three following alternatives: \$10,000 now; \$2,000 a year for eight years; or \$24,000 at the end of eight years. Assuming you could earn 11 percent annually, which alternative should you choose? If you could earn 12 percent annually, would you still choose the same alternative?

• ### Ten years ago your grandfather purchased for you a 25-year \$1,000 bond with a coupon rate...

Ten years ago your grandfather purchased for you a 25-year \$1,000 bond with a coupon rate of 9 percent. You now wish to sell the bond and read that yields are 8 percent. What price should you receive for the bond? Assume that the bond pays interest annually. Use Appendix B and Appendix D to answer the question. Round your answer to the nearest dollar. \$   Appendix B Appendix D

• ### Your father offers you a choice of \$125,000 in 11 years or \$45,500 today. Use Appendix B as an ap...

Your father offers you a choice of \$125,000 in 11 years or \$45,500 today. Use Appendix B as an approximate answer, but calculate your final answer using the formula and financial calculator methods. a-1. If money is discounted at 8 percent, what is the present value of the \$125,000? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)    a-2. Which offer should you choose?    \$45,500 today \$125,000 in 11 years b-1. Now assume the offer is...

• ### You need \$25,856 at the end of 9 years, and your only investment outlet is an...

You need \$25,856 at the end of 9 years, and your only investment outlet is an 8 percent long-term certificate of deposit (compounded annually). With the certificate of deposit, you make an initial investment at the beginning of the first year. Use Appendix B and Appendix C for an approximate answer, but calculate your final answer using the formula and financial calculator methods. a. What single payment could be made at the beginning of the first year to achieve this...

• ### Your uncle offers you a choice of \$112,000 in 10 years or \$51,000 today. Use Appendix...

Your uncle offers you a choice of \$112,000 in 10 years or \$51,000 today. Use Appendix B as an approximate answer, but calculate your final answer using the formula and financial calculator methods. a-1. If money is discounted at 8 percent, what is the present value of the \$112,000? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Present value