Question: answer Relationship between future value and present value-Mixed stream Using the information in the accompanying table, the questions that follow a. Determine the present value

answer Relationship between future value and present value-Mixed stream Using the information in the accompanying table, the questions that follow a. Determine the present value of the mixed stream of cash flows using a 4% discount rate. b. Suppose you had a lump sum equal to your answer in part a on hand today. If you invested this sum for 5 years and earned a 4% return each year, how much would you have after 5 years? c. Determine the future value 5 years from now of the mixed stream, using a 4% interest rate. Compare your answer here to your answer in part b. d. How much would you be willing to pay for an opportunity to buy this stream, assuming that you can at best earn 4% on your investments? a. The present value of the mixed stream of cash flows using a 4% discount rate is $ . (Round to the nearest cent.) - - X Data table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Year (0) 0 1 2 3 4 5 Cash flow $0 $900 $900 $1,200 $1,400 $2,000 Check answer Help me s Future value of an annuity Using the values below, answer the questions that follow. (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Amount of annuity Interest rate Deposit period (years) $500 12% 6 a. Calculate the future value of the annuity, assuming that it is (1) An ordinary annuity (2) An annuity due. b. Compare your findings in parts a(1) and a(2). All else being identical, which type of annuity---ordinary or annuity due is preferable as an investment? Explain why. a. (1) The future value of the ordinary annuity is $ 4057.59 (Round to the nearest cent.) (2) The future value of the annuity due is $. (Round to the nearest cent.)
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
