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Author Question: Dan and Jia are newlyweds and have just purchased a condominium for 70,000. Since the condo is very ... (Read 178 times)

hubes95

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on: Jul 10, 2018
Dan and Jia are newlyweds and have just purchased a condominium for 70,000. Since the condo is very small, they hope to move into a single-family house in 5 years.
 
  How much will their condo worth in 5 years if inflation is expected to be 8 percent?

Question 2

The net present value of the project when adjusting for risk is ________. (See Table 11.7)
 
  A) -9,300
  B) 0
  C) 87,000
  D) 105,000


leahchrapun

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Reply #1 on: Jul 10, 2018
Answer to Question 1

PV = 70,000, r = 8, n = 5
FV = 70,000(1.08)5 = 102,853

Answer to Question 2

A


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