What is the PVGO and the AIP

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Reference no: EM131870972

1. An investment will pay $100 at the end of each of the next 3 years, $250 at the end of Year 4, $300 at the end of Year 5, and $600 at the end of Year 6.

a. If other investments of equal risk earn 5% annually, what is its present value? Round your answer to the nearest cent.

b. If other investments of equal risk earn 5% annually, what is its future value? Round your answer to the nearest cent.

2. Xyz Co. can earn $9 per share forever. You can take 20% of their earnings and invest it in a factory that will earn 8%. Shareholders need to earn 10%. What is the PVGO and the AIP.

Reference no: EM131870972

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