Ask Experts Questions for FREE Help !
Ask
    tbaby103694's Avatar
    tbaby103694 Posts: 1, Reputation: 1
    New Member
     
    #1

    Nov 11, 2007, 03:00 PM
    Time Value of Money calculations
    P9-17 (Present value)
    Jack Hammer invests in a stock that will pay dividends of $2.00 at the end of the first year; $2.20 at the end of the second year; and $2.40 at the end of the third year. Also, he believe that at the end of the third year, he will be able to sell the stock for $33. What is the present value of all future benefits if a discount rate of 11 percent is applied? (Round all values to two places to the right of the decimal point).

    P9-22 (Alternative present values)
    Your rich godfather has offered you a choice of one of the three following alternatives: $10,000 now; $2,000 a year from eight years; or $24,000 at the end of eight years. Assuming you could earn 11 percent annually, which alternative should you choose? If you could earn 12 percent annually, would you still choose the same alternative?

    P9-23 (Payments required)
    You need $28,974 at the end of 10 years, and your only investment outlet is an 8 percent long-term certificate of deposit (compounded annually). With the certificate of deposit, you make an initial investment at the beginning of the first year.
    a. What single payment could be made at the beginning of the first year to achieve this objective?
    b. What amount could you pay at the end of each year annually for 10 years to achieve this same objective?
    facade0865's Avatar
    facade0865 Posts: 2, Reputation: 1
    New Member
     
    #2

    Apr 7, 2008, 06:49 AM
    Jack Hammer invests in a stock that will pay dividends of $2.00 at the end of the first year; $2.20 at the end of the second year; and $2.40 at the end of the third year. Also, he believe that at the end of the third year, he will be able to sell the stock for $33. What is the present value of all future benefits if a discount rate of 11 percent is applied? (Round all values to two places to the right of the decimal point).

Not your question? Ask your question View similar questions

 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Time Value of Money [ 4 Answers ]

Jack Hammer invests in a stock that will pay dividends of $2.00 at the end of the first year; $2.20 at the end of the second year; and $2.40 at the end of the third year. Also, he believes that at the end of the third year he will be able to sell the stock for $33. What is the present value of all...

Time Value of Money [ 3 Answers ]

How do I work this problem? Any help would be appreciated! Henson Company wishes to accumulate $500,000 by May 1, 2012 by making 8 equal annual deposits beginning May 1, 2004 to fund paying 8% interest compounded annually. What is the required amount of each deposit? a) $87,008 b) $47,007...

Time value of money [ 2 Answers ]

I need help with these two questions... How much must be deposited at the beginning of each year in order to accumulate $10,000 in four years if interest is at 9%? Patented processes that will result in cash receipts of $2,500 at the end of each of the next four years and a ballon receipt...


View more questions Search