What is present value of annual cash flow

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Reference no: EM131969349

A. An investment, which is worth $7,150 and has an expected return of 3.25 percent, is expected to pay fixed annual cash flows forever with the next annual cash flow expected in 1 year. What is the present value of the annual cash flow that is expected in 4 years from today?

A. An amount equal to or greater than $200.00 but less than $225.00

B. An amount equal to or greater than $225.00 but less than $250.00

C. An amount equal to or greater than $250.00 but less than $280.00

D. An amount equal to or greater than $280.00 but less than $350.00

E. An amount less than $200.00 or an amount equal to or greater than $350.00

B. Three years ago, Sergio deposited $16,800 in an account that has earned and will earn 6.30 percent per year in compound interest. If Ruth deposits $19,200 in an account in 2 years from today that earns simple interest, then how much simple interest per year must Ruth earn to have the same amount of money in 6 years from today as Sergio will have in 6 years from today? Answer as an annual rate.

A. A rate less than 2.00% or a rate equal to or greater than 15.00%

B. A rate equal to or greater than 2.00% but less than 5.50%

C. A rate equal to or greater than 5.50% but less than 9.50%

D. A rate equal to or greater than 9.50% but less than 12.50%

E. A rate equal to or greater than 12.50% but less than 15.00%

Reference no: EM131969349

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