Answer:
Selection 1 has lowest NPV = $316.9
Explanation:
Rate of discount is 10% therefore PV factor for every year =
Here 0.1 because interest rate is 10% n = number of year for year 1 = 1 for year 2 = 2 and so on.
Selection 1
Year Cash Flow PV Factor Value
1 $100 0.909 $90.9
2 $100 0.826 $82.6
3 $100 0.751 $75.1
4 $100 0.683 $68.3
Net Present Value = $316.9
Selection 2
In this only in 4th year the payment is received = $500 X 0.683 PV Factor
= $341.5
Selection 3
Only in year 1 $350 is received = $350 X 0.909 = $318.15
Selection 4
Year Cash Flow PV Factor Value
1 $50 0.909 $45.45
2 $50 0.826 $41.3
3 $50 0.751 $37.55
4 $375 0.683 $256.125
Net Present Value = $380.425
Selection 1 has lowest NPV = $316.9
Answer: Goldman Sachs
Explanation:
If all shares rose by 5% in the value, the biggest contributor to the S&P 500 's upward movement would be the one with the highest weight from the listed options.
From the options listed, Apple has a weight of 4.955 , General Electric is not listed, Exxon Mobil has a weight of 2.1417 and Goldman Sachs has a weight of 5.1177.
Goldman Sachs has the largest weight and so would contribute the most.
Answer:
After 4 years the amount of money in the account will be $10,704.8
The interest earned is $1,204.8
Explanation:
To calculate future value on a certain amount (principal), with compound interest, the formula below is used:
FV = PV ×
where:
FV = Future value
PV = present value = principal = $9,500
r = interest rate in decimal = 3% = 0.03
n = compounding period per year = quarterly = 3 times per year
t = time in years = 4 years
∴ FV = 9,500 ×
FV = 9,500 ×
FV = $10,704.8 (to 1 decimal place)
interest earned = future value - Present value
= 10,704.8 - 9,500 = $1,204.8