Question: Consider a security that will pay the owner $4,555 in two years and then another $6,500 in four years. If the interest rate is 10%,

Consider a security that will pay the owner $4,555 in two years and then another $6,500 in four years. If the interest rate is 10%, what is the present value of this security?

A. $8,204

B. $8,444

C. $8,720

D. $8,990

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

You wish to buy a $9,000 dining room set. The furniture store offers you a 3-year loan with an 10 percent APR. What are the monthly payments?How would the payment differ if you paid interest only?...

Question: 1.A corporation is a legal entity that is generally created by a state; its life and existence is separate from the lives of its individual owners and managers. a.Limited liability of its...

Your parents have come to you for financial advice because you have told them about this incredible finance course you are taking and they are paying for. Your parents have been offered an investment...

USE THE FOLLOWING PROJECT CASH FLOWS FOR QUESTIONS 12-16: Project A Project B Project C Project D Project E Today (20,000) (30,000) (8,000) (3,000) (6,000) Year 1 10,000 2,000 1,000 1,000 750 Year 2...

Grizzly Bear Tours Inc is purchasing new helicopter for its wilderness Grizzly Bear trips. Two payment choices are available, shown below as A and B. ITEM A B 0 Down payment (paid today) $10,000...

Questions: 1. You are told that a security pays $55 in one year and $133 in three years. Find the appropriate interest rate on this security to get you a present value of $150? [Hint: Consider using...

. Use separate sheets to solve each of the following questions. Show your calculations in excel. 1.You are told that a security pays $55 in one year and $133 in three years. Find the appropriate...

Help me please with clear and detailed explanation of the answer 1. Which of the following statements is CORRECT? "' 0 A corporation is a legal entity that is generally created by a state; its life...

2005 5678 5802 SHOT 182 QUESTION 11 Luther Corporation Consolidated Income Statement Year Ended December 31 in Smillions) 2006 Totales COM Grosseront 1000 Seling general and adminlerative expenses...

Explain the difference between positive and negative cash flow. If you borrow $20,000 from a bank, is that a positive or negative cash flow? Justify your answer. What is the formula to calculate how...

what is collaborative planning forecasting and replenishments and what is the benefit of to the supply chain management?

What is the peak amplitude, frequency (angular and Hertz), and period of the following waves? a. s(t)=2 cos (80 at + n) b. s(t)=sin (14xt)

LK is a private limited company and it owns and operates three cafs in a city centre. Customers expect the cafs to provide a quality service and also to be 'value for money. There has been an...

Merely observing how others do things is not nearly as effective as observing and about how others do things. ( Enter one word in theblank )

8. List and briefly explain each of the five steps in the training process.

3. What are some typical on-the-job training techniques? What do you think are some of the main drawbacks of relying on informal on-the-job training for breaking new employees into their jobs?

4. One reason for implementing global training programs is the need to avoid business losses due to cultural insensitivity. What sort of cultural insensitivity do you think is referred to, and how...