What is the most he should offer to pay cattle today

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Reference no: EM132164173

1. Assuming an interest rate of 4 percent, the present value of $75,000 received in five years is...

A. $61,642.50.

B. $71, 540.20.

C. $6,106.50.

D. $8,520.20.

2. Matt wants to invest in a raising and selling cattle. It takes 4 years for the cattle to be large enough to sell, and he thinks they can be sold for $75,000. If Matt wants to earn an annual investment return of 10 percent on his money, what is the most he should offer to pay cattle today?

A. $35,658.

B. $51,226.

C. $53,439.

D. $65,092.

3. Bill hired an attorney and threatened to sue his employer for experiencing ill side effects from extended exposure to chemicals. The employer offered a settlement. Under terms of the settlement, the company will pay Bill $150,000 per year for five years, with the first payment one year from today. Assuming an interest rate of 4 percent, what is the present value of this settlement offer?

A. $580,058.

B. $667,770.

C. $450,256.

D. $650,203.

5. City General Contractors plans to replace its entire fleet of service vehicles. City expects this investment to result in cash flow savings of $12,000 the first year, $22,000 the second year, and $18,000 the third year. At that time, they expect to have to replace the vehicles again. If the interest rate is five percent, the present value of the savings is...

A. $47,881.20.

B. $58,568.10

C. $65,125.40.

D. $39,548.25.

Reference no: EM132164173

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