Question: Please solve all need help will give thumbs up 1. Problem 5.07 (Present and future Values of a Cash Flow Stream) An Investment will pay



1. Problem 5.07 (Present and future Values of a Cash Flow Stream) An Investment will pay $50 at the end of each of the next 3 years, $200 at the end of Year 4, $400 at the end of Year 5, and $600 at the end of Year 6. If other investments of equal risk earn 8% annually, what is its present value? Its future value? Do not round intermediate calculations. Round your answers to the nearest cent. Present value: $ Future value: $ 3. Problem 5.16 (Present Value of a Perpetuity) What is the present value of a $900 perpetulty if the Interest rate is 10%? If interest rates doubled to 20%, what would its present value be? Round your answers to the nearest cent Present value at 10%:$ Present value at 20%:$ 4. Problem 5.17 (Effective Interest Rate) You borrow $115,000; the annual loan payments are $11,193.68 for 30 years. What interest rate are you being charged? Round your answer to the nearest whole number. % 6. Problem 5.20 (PV of a Cash Flowstream) A rookle quarterback is negotiating his first NFL contract. His opportunity cost is 7%. He has been offered three possible 4-year contracts. Payments are guaranteed, and they woul be made at the end of each year. Terms of each contract are as follows: 2. Contract 1 $2,500,000 $2,500,000 $2,500,000 $2,500,000 Contract 2 $2,500,000 $3,500,000 $4,000,000 $5,500,000 Contract 3 $6,500,000 $1,500,000 $1,500,000 $1,500,000 As his adviser, which contract would you recommend that he accept? Select the correct answer. ca. Contract 3 gives the quarterback the highest present value; therefore, he should accept Contract 3. cb. Contract 1 gives the quarterback the highest future value; therefore, he should accept Contract 1. c. Contract 3 gives the quarterback the highest future value; therefore, he should accept Contract 3. d. Contract 1 gives the quarterback the highest present value; therefore, he should accept Contract 1. e. Contract 2 gives the quarterback the highest present value; therefore, he should accept Contract 2
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
