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Author Question: David has purchased an investment that he expects to produce an annual cash flow of $3,000 for five ... (Read 30 times)

yulisa3298

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Question 1

Compute the present value of the following cash flow discounted at 8%.

End of YearCash flow
1$850
2$500
3$200

◦ $1,374.47
◦ $973.97
◦ $1,174.58
◦ $1,024.65

Question 2

David has purchased an investment that he expects to produce an annual cash flow of $3,000 for five years. He requires an 8% rate of return compounded annually. What is the maximum amount that David can pay and still earn the required rate of return?
◦ $19,008
◦ $15,000
◦ $14,764
◦ $11,978


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Marked as best answer by yulisa3298 on Mar 29, 2022

Karla347

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yulisa3298

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Reply 2 on: Mar 29, 2022
YES! Correct, THANKS for helping me on my review


kjohnson

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Reply 3 on: Yesterday
Excellent

 

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