Determine the appropriate discount factor

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Question 1: At an interest rate of 14%, approximately how much would you need to invest today if you wanted to have $2,000,000 in 10 years? (Ignore income taxes.)

Determine the appropriate discount factor(s) using the tables provided. (Round your intermediate calculations to 3 decimal places.)

A) $383,436

B) $540,000

C) $740,741

D) $1,043,200

Question 2: A company wants to have $40,000 at the end of a five-year period through investment of a single sum now. How much needs to be invested in order to have the desired sum in five years, if the money can be invested at 10% (Ignore income taxes.)?

Determine the appropriate discount factor(s) using the tables provided. (Round your intermediate calculations to 3 decimal places.)

A) $10,551

B) $8,000

C) $24,840

D) $12,882

Question 3: Domebo Corporation has entered into a 7 year lease for a piece of equipment. The annual payment under the lease will be $3,400, with payments being made at the beginning of each year. If the discount rate is 14%, the present value of the lease payments is closest to (Ignore income taxes.):

Determine the appropriate discount factor(s) using the tables provided. (Round your intermediate calculations to 3 decimal places.)

A) $9,511

B) $16,623

C) $20,877

D) $23,800

Question 4: In order to receive $12,000 at the end of three years and $10,000 at the end of five years, how much must be invested now if you can earn 14% rate of return? (Ignore income taxes.)

Determine the appropriate discount factor(s) using the tables provided. (Round your intermediate calculations to 3 decimal places.)

A) $12,978

B) $8,100

C) $13,290

D) $32,054

Reference no: EM132526518

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