Given a 7 percent interest rate, compute the present value of payments made in years 1, 2, 3, and 4 of $1,350, $1,550, $1,550, a
igor_vitrenko [27]
Answer:
The present value of cash flows is $ 5,292.13
Explanation:
The present value is today's equivalence of the company's future cash flow discounted using the 7% interest rate as a discount rate.
Formula for pv of a cash flow=cash flow/(1+r)^n
r is the 7% interest rate
n is the relevant year each cash flow relates to
PV=$1,350/(1+7%)^1+$1550/(1+7%)^2+$1550/(1+7%)^3+$1850/(1+7%)^4=
$ 5,292.13
Answer:The correct answer is a). $9,918.50
Explanation: In selling, the investor will use the bid price of $4.89 alongside the face value of the bill.
That is to say, the face value * (1-(bid price * no. of days)/days in a year) = 10000 * (1-(0.0489*60)/360) = $9,918.50
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Answer:
The discount rates were lowered
Explanation:
Discount rate is the rate that is used to determine the present value of future cash flows that will be spent in a project.
This is different from the cost of capital which is the amount that just meets the incurred cost of executing a project.
Discount rate determines of the benefits of the project are greater than the cost.
In the given scenario where benefits balance the cost, the project will be worthwhile is discount rate is lower.
That is there will be a lower cost of execution of the project so revenue will be higher than the cost
Introduction
main body of presentation should include for/against if applicable and an evaluation of the points raised
a conclusion
