« previous next »

Author Question: Which is greater, the present value of a 1,000 five-year ordinary annuity discounted at 10, or the ... (Read 29 times)

ss2343

  • Hero Member
  • *****
  • Posts: 548
on: Jul 10, 2018
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
Foundations of Finance ¦ Keown, Petty, Martin ¦ 9th Edition
Buy Test-Bank


Jsherida

  • Sr. Member
  • ****
  • Posts: 314
Reply #1 on: Jul 10, 2018
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
« previous next »
 

Did you know?

In the ancient and medieval periods, dysentery killed about ? of all babies before they reach 12 months of age. The disease was transferred through contaminated drinking water, because there was no way to adequately dispose of sewage, which contaminated the water.

Did you know?

People who have myopia, or nearsightedness, are not able to see objects at a distance but only up close. It occurs when the cornea is either curved too steeply, the eye is too long, or both. This condition is progressive and worsens with time. More than 100 million people in the United States are nearsighted, but only 20% of those are born with the condition. Diet, eye exercise, drug therapy, and corrective lenses can all help manage nearsightedness.

Did you know?

Although not all of the following muscle groups are commonly used, intramuscular injections may be given into the abdominals, biceps, calves, deltoids, gluteals, laterals, pectorals, quadriceps, trapezoids, and triceps.

Did you know?

Aspirin is the most widely used drug in the world. It has even been recognized as such by the Guinness Book of World Records.

Did you know?

Drying your hands with a paper towel will reduce the bacterial count on your hands by 45–60%.

Greater Swiss Mountain Dog Greater Swiss Mountain Dog
The heme group is present in myoglobin, hemoglobin, and many other proteins The heme group is present in myoglobin, hemoglobin, and many other proteins
How to calculate annuity when compounded quarterly (Part 2) How to calculate annuity when compounded quarterly (Part 2)
How to calculate present value (Question 1) How to calculate present value (Question 1)
Estimated number of new HIV infections per year over time period in Canada Estimated number of new HIV infections per year over time period in Canada
No payments were made on a $2,598 loan during its three-year term. What was the annually ... No payments were made on a $2,598 loan during its three-year term. What was the annually ...
Video: Retina

For a complete list of videos, visit our video library