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Author Question: Consider the two investments shown in the table. Find the present value of each at Year 0 assuming ... (Read 83 times)

craiczarry

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  • Posts: 527
on: Apr 25, 2021

Question 1

As the discount rate increases without limit, the present value of the future cash inflows
◦ gets larger without limit.
◦ stays unchanged.
◦ approaches zero.
◦ gets smaller without limit, i.e., approaches minus infinity.

Question 2

Consider the two investments shown in the table. Find the present value of each at Year 0 assuming an interest rate of 5%. What is the percentage difference in the present values (with Investment 1 as the base of the percentage)? 

YearInvestment #1Investment #2
0$0$0
1$100$100
2$100$1,100
3$1,100$0

◦ -3.8%
◦ -2.6%
◦ 3.5%
◦ 4.3%
◦ -4%
Corporate Finance Online ¦ Eakins, McNally ¦ 2nd Edition
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Marked as best answer by craiczarry on Apr 25, 2021

welcom1000

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Reply #1 on: Apr 25, 2021
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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craiczarry

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Reply 2 on: Apr 25, 2021
Great answer, keep it coming :)

zacnyjessica

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

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