P5-13 Time value Jim Nance has been offered an investment that will pay him $500 three years from today. a. If his opportunity cost is 7% compounded annually, what value should he place on this opportunity today? b. What is the most he should pay to purchase this payment today? c. If Jim can purchase this investment for less than the amount calculated in part a, what does that imply about the rate of return that he will earn on the investment? P5-30 Value of mixed streams Find the present value of the streams of cash flows shown in the following table. Assume that the firm ‘ s opportunity cost is 12%. Please show your work. A B C Year Cash flow Year Cash flow Year Cash flow 1 -$2,000 1 $10,000 1-5 $10,000/yr 2 3,000 2 – 5 5,000/yr 6 – 10 8,000/yr 3 4,000 6 7,000 4 6,000 5 8,000
Looking for solution of this Assignment?
WHY CHOOSE US?
We deliver quality original papers |
Our experts write quality original papers using academic databases. |
Free revisions |
We offer our clients multiple free revisions just to ensure you get what you want. |
Discounted prices |
All our prices are discounted which makes it affordable to you. Use code FIRST15 to get your discount |
100% originality |
We deliver papers that are written from scratch to deliver 100% originality. Our papers are free from plagiarism and NO similarity |
On-time delivery |
We will deliver your paper on time even on short notice or short deadline, overnight essay or even an urgent essay |