Time Value of Money

Time Value of Money Exercises 1. What is the balance in an enthronisation account at the difference of 10 years if $5,000 is invested straightforward off and the account understands 8% interest compounded p.a.? What would the encourage be after 50 years? aft(prenominal) vitamin C years? 2. What is the present value of the following next amounts: next ValueDiscount rateNumber of periods $15,0006%5 $37,0009%10 $596,00011%4 $1,178,0009.5%12 3. calculate the present value of the following silver inflows expect an 11% discount rate. Yearcash flow 117,000 217,000 317,000 417,000 517,000 6100,000 4. knock over the following both mutually exclusive projects YearCash Flow see to it 1Cash Flow start 2 0-150,000-150,000 1$40,000$100,000 2$90,000$80,000 3$120,000$60,000 a) Calculate the convey in present value (NPV) of individually project assuming an 8% discount rate. b) Calculate the Internal Rate of hold back (IRR) for each project. 5. Anne Jones checked her lottery ticket once again. The poetry matched; she had win the $10,000,000 inflated prize.

The lottery provided two plectrums for retribution of the grand prize. First, the winner could take $1,000,000 immediately, with the remainder payable in $1,000,000 instalments over ix years, starting one year from now. The alternative payment option was an immediate lump sum payment of $7,000,000. Anne believes that she stooge earn a rate of return of 7 per ! centime on any money she receives. a) Which payment option would you invoke that Anne allot? b) What Interest rate would make these two options uniform? 6. You be intentionning to establish a retirement savings device by setting aside money at the lead of each year. It is your hope to retire at age 55 with a pension income of $100,000 per year received at the annul of each year, for 20 years, from the...If you want to get a beneficial essay, order it on our website: BestEssayCheap.com

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