What is present value

Assignment Help Financial Management
Reference no: EM132030386

Your father offers you a choice of $135,000 in 13 years or $46,500 today. Use Appendix B as an approximate answer, but calculate your final answer using the formula and financial calculator methods.

a. 1. If money is discounted at 10 percent, what is the present value of the $135,000? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

2. Which offer should you choose?

$135,000 in 13 years

$46,500 today

b-1. Now assume the offer is $135,000 in 10 years or $46,500 today. What is the present value of the $135,000 at 10 percent for 10 years? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

b-2. Now, which offer should you choose?

$46,500 today

$135,000 in 10 years

Reference no: EM132030386

Questions Cloud

Find amazon cost of equity : Use the 10 year Treasury Bond rate as the risk free rate and assume that the market risk premium is 7% to find Amazon’s cost of equity.
What is the future value of annuity : What is the future value of a 13-year annuity of $3,000 per period where payments come at the beginning of each period?
How much would you have to invest today to receive : How much would you have to invest today to receive the following? Calculate your final answer using the formula and financial calculator methods.
Continue growing at the historic rate for foreseeable future : Dividends are expected to continue growing at the historic rate for the foreseeable future.
What is present value : If money is discounted at 10 percent, what is the present value of the $135,000?
In the practical use of credit default swaps : In the practical use of credit default swaps there:
What is the projected production for may : Homestyle Interiors sells a variety of home furnishings including entertainment centers. What is the projected production for May?
What are the projected long-term liabilities : If the firm expects to need $500,000 in net new financing, what are the projected long-term liabilities?
Think that the credit unions are to the financial system : How important do you think that the credit unions are to the financial system?

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd