Author Question: Which is greater, the present value of a 1,000 five-year ordinary annuity discounted at 10, or the ... (Read 70 times)

ss2343

  • Hero Member
  • *****
  • Posts: 548
Which is greater, the present value of a 1,000 five-year ordinary annuity discounted at 10, or the present value of a 1,000 five-year annuity due discounted at 10?
 
  A) The ordinary annuity is worth more with a present value of 3,790.79.
  B) The annuity due is worth more with a present value of 4,169.87.
  C) The ordinary annuity is worth more with a present value of 4,169.87.
  D) The annuity due is worth more with a present value of 4,586.85.

Question 2

Which of the following dividend policies will cause dividends per share to fluctuate the most?
 
  A) constant dividend payout ratio
  B) small, low, regular dividend plus a year-end extra
  C) stable dollar dividend
  D) no difference between the various dividend policies


Jsherida

  • Sr. Member
  • ****
  • Posts: 314
Answer to Question 1

Answer: B
Explanation: B)
PV = PMT  = 1,000  = 3,790.79.
MODE = END
INPUT 5 10 ? -1,000 0
KEY N I/Y PV PMT FV
CPT 3,790.79
The PV of the annuity due is worth 3,790.79  (1.10) = 4,169.87.

Answer to Question 2

A



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

About one in five American adults and teenagers have had a genital herpes infection—and most of them don't know it. People with genital herpes have at least twice the risk of becoming infected with HIV if exposed to it than those people who do not have genital herpes.

Did you know?

Eat fiber! A diet high in fiber can help lower cholesterol levels by as much as 10%.

Did you know?

Though Candida and Aspergillus species are the most common fungal pathogens causing invasive fungal disease in the immunocompromised, infections due to previously uncommon hyaline and dematiaceous filamentous fungi are occurring more often today. Rare fungal infections, once accurately diagnosed, may require surgical debridement, immunotherapy, and newer antifungals used singly or in combination with older antifungals, on a case-by-case basis.

Did you know?

Inotropic therapy does not have a role in the treatment of most heart failure patients. These drugs can make patients feel and function better but usually do not lengthen the predicted length of their lives.

Did you know?

The shortest mature adult human of whom there is independent evidence was Gul Mohammed in India. In 1990, he was measured in New Delhi and stood 22.5 inches tall.

For a complete list of videos, visit our video library