A project will produce cash flows of $4,000, $4,500. $6,500, and $8,000 a year f

Question

A project will produce cash flows of $4,000, $4,500. $6,500, and $8,000 a year for the next four years, respectively. What is the value of these cash flows today at a discount rate of 7.5 per cent? a $18,817.57 b. $19,286 85 e. $23,915 49 d. $25,156.99 Today you arc opening a savings account and depositing an initial $2,000 into it. You plan to deposit $3,000 into the account three years from today and deposit another $5,000 four years from today. How much will you have in your account five years from today if you earn a 10 percent rate of return? a $11,857.02 b. $12,351.02 e. $14,526.10 d. $16,105.10 What is the effective annual rate of 12.5 percent compounded monthly? l. 12.50percent b. I3.10perccnt c. 1324 percent d. 13.31 percent What is the effective annual rate of 14.7 percent compounded daily? a. 15.24 percent b. 15.53 percent c. 15.73 percent d. 15.83 percent You borrow $155,000 for thirty-five years at 7 percent. This is an amortized loan with monthly payments. How much of the first payment goes to the principle balance of the loan? Assume that one month is equal to 1/12 of a year. a. $80.31 b. $86.06 c. $984.48 d. $990.23

Explanation / Answer

A project will produce cash flows of $4,000, $4,500. $6,500, and $8,000 a year f

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