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Investment X offers to pay you $7,700 per year for 9 years,whereas Investment Y offers to

Investment X offers to pay you $7,700 per year for 9 years,whereas Investment Y offers to

Investment X offers to pay you $7,700 per year for 9 years,whereas Investment Y offers to pay you $10,600 per year for 5years.

 

Requirement1:

 

(a)

If the discount rate is 7 percent, what is the present value ofthese cash flows? (Enter rounded answers as directed, butdo not use rounded numbers in intermediate calculations. Round youranswers to 2 decimal places (e.g., 32.16).)

 

 

  Present value

  Investment X

$   

  Investment Y

$   

 

   

 

(b)

Which of these cash flow streamshas the higher present value at 7 percent?

 

 

 

(Click to select)InvestmentYInvestment X

 

Requirement2:

 

(a)

If the discount rate is 21 percent, what is the present value ofthese cash flows? (Enter rounded answers as directed, butdo not use rounded numbers in intermediate calculations.Round your answers to 2 decimal places (e.g.,32.16).)

 

 

  Present value

  Investment X

$   

  Investment Y

$   

 

   

 

(b)

Which of these cash flow streamshas the higher present value at 21 percent?

 

 

 

(Click to select)InvestmentYInvestment X

Abhinav 04-Dec-2019

Answer (UnSolved)

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