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Author Question: What is the present value of the following perpetuities? a. 200 per year discounted at 6 annually ... (Read 56 times)

humphriesbr@me.com

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on: Jul 11, 2018
What is the present value of the following perpetuities?
  a. 200 per year discounted at 6 annually
  b. 500 per year discounted at 9 annually
  c. 1,000 per year discounted at 5 annually
  d. 550 per year discounted at 8 annually
 
  What will be an ideal response?

Question 2

An investment will pay 500 in three years, 700 in five years and 1000 in nine years. If your opportunity rate
  is 6, what is the present value of this investment?
 
  What will be an ideal response?
Foundations of Finance ¦ Keown, Petty, Martin ¦ 9th Edition
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af

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

a. 3,333.33
b. 5,555.56
c. 20,000.00
d. 6,875.00

Answer to Question 2

1,534.79


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