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Author Question: What is the value of an asset which pays 200 a year for the next 5 years and can be sold for 1,500 ... (Read 78 times)

mckennatimberlake

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on: Jul 11, 2018
What is the value of an asset which pays 200 a year for the next 5 years and can be sold for 1,500 at the end of five years from now? Assume that the opportunity cost is 10 percent.
 
  What will be an ideal response?

Question 2

Government can obtain funds ________.
 
  A) by trading in equity market
  B) by issuing financial instruments such as futures and options
  C) through forex market
  D) by selling debt securities


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alexanderhamilton

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Reply #1 on: Jul 11, 2018
Answer to Question 1

Using Financial calculator: FV=1500, PMT=200, N=5, I=10, CPT PV = -1689.54
The value of the asset = 1,689.54.

Answer to Question 2

D


mckennatimberlake

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Reply 2 on: Jul 11, 2018
Great answer, keep it coming :)

coreycathey

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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