(Related to Checkpoint? 6.6)?? ?(Present value of annuities and complex cash flows?) You are given three investment...

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(Related to Checkpoint? 6.6)??
?(Present value of annuities and complex cash flows?)
You are given three investment alternatives to analyze. The cashflows from these three investments are as? follows:
Investment Alternatives
End of Year
A
B
C
1
?$
15,000
?$
15,000
2
??
15,000
3
??
15,000
4
??
15,000
5
??
15,000
?$
15,000
??
6
??
15,000
75,000
7
15,000
8
15,000
9
15,000
10
15,000
15,000
Assuming an annual discount rate of 23 ?percent, find thepresent value of each investment.
a.??What is the present value of investment A at an annualdiscount rate of 23 percent?
???(Round to the nearest? cent.)
b.??What is the present value of investment B at an annualdiscount rate of
23 ?percent????(Round to the nearest? cent.)
c.??What is the present value of investment C at an annualdiscount rate of 23 ?percent??
?(Round to the nearest? cent.)

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3.7 Ratings (529 Votes)

Answer a Discount rate 23 Annual cash flows year 1 to year 5 15000 Present value Annual cash flows PV of 1 annuity for 5 years at 23 rate 15000 1 1 1 23 5 23 4205209467 Present value of See Answer

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Transcribed Image Text

(Related to Checkpoint? 6.6)???(Present value of annuities and complex cash flows?)You are given three investment alternatives to analyze. The cashflows from these three investments are as? follows:Investment AlternativesEnd of YearABC1?$15,000?$15,0002??15,0003??15,0004??15,0005??15,000?$15,000??6??15,00075,000715,000815,000915,0001015,00015,000Assuming an annual discount rate of 23 ?percent, find thepresent value of each investment.a.??What is the present value of investment A at an annualdiscount rate of 23 percent????(Round to the nearest? cent.)b.??What is the present value of investment B at an annualdiscount rate of23 ?percent????(Round to the nearest? cent.)c.??What is the present value of investment C at an annualdiscount rate of 23 ?percent???(Round to the nearest? cent.)

Investment Alternatives
End of Year	A		B		C
1	?$	15,000			?$	15,000
2	??	15,000
3	??	15,000
4	??	15,000
5	??	15,000	?$	15,000	??
6			??	15,000		75,000
7				15,000
8				15,000
9				15,000
10				15,000		15,000