You have won a prize which promises to pay you $10,000 in 3 years and $7,000...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
You have won a prize which promises to pay you $10,000 in 3 years and $7,000 in 8 years. If the appropriate discount rate is 9.6%, how much is the prize worth today? (please round your answer to the nearest dollar - please do not include commas in your answer) You have won a prize which promises to pay you $10,000 in 3 years and $7,000 in 8 years. If the appropriate discount rate is 9.6%, how much is the prize worth today? (please round your answer to the nearest dollar - please do not include commas in your answer)
Expert Answer:
Answer rating: 100% (QA)
SOLUTION To calculate the present value of the prize we need to d... View the full answer
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0077861629
8th edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
Posted Date:
Students also viewed these finance questions
-
Marco Nelson opened a frame shop and completed these transactions: 1. Marco started the shop by investing $40,700 cash and equipment valued at $18,700 in exchange for common stock. 2. Purchased $140...
-
What is the future value of $1,101 invested for 9 years at 7 percent compounded annually? 2. What is the present value of $18,664 to be received 7 years from today if the discount rate is 7 percent?...
-
You have just had a tenant sign a lease contract that guarantees you payments of $100,000 at the end of each year for the next five years. What is the present value of these future cash flows...
-
Popsters just opened a branch in Baguio City this December 2015. Summary of transactions for the first month of operations follows: 1. Baguio Branch received P15,750 cash from home office to start...
-
A uniformly loaded square crate is released from rest with its corner D directly above A; it rotates about A until its corner B strikes the floor, and then rotates about B. The floor is sufficiently...
-
Reaction 6-7 is allowed to come to equilibrium in a solution initially containing 0.0100 M BrO - 3 , 0.0100 M Cr 3+ , and 1.00 M H + . To find the concentrations at equilibrium, we can construct a...
-
A political pollster approaches people on the street and asks them to describe their political affiliation. Twenty-eight people describe themselves as Democrats, 25 as Republicans, 8 people provide a...
-
An inexperienced accountant prepared this condensed income statement for Hight Company, a retail firm that has been in business for a number of years. HIGHT COMPANY Income Statement For the Year...
-
It is May 2020. Marge, age 80, was recently widowed and is of sound mind. She was quite shocked by the sudden death of her husband, Gus, due to Covid-19 virus and realizes that life is precious....
-
In this mini-case, you will complete the test of details on accounts receivable for the 2019 audit of EarthWear Clothiers, Inc. The principal test of detail involves sending "confirmations" or...
-
Find the second coupon payment you would receive on a TIPS with an initial face value of $100,000 and a coupon rate of 2.25%. The applicable annual inflation rates are 4.50% and 5.50%.
-
financial forecasting create a reaction scenario for management flexibility for any critical situation., explain
-
How do I set up the 10 NPV calculations for The Mexton Case?
-
Nadya Trojanowski, CEO of the new start-up Ayuda.ai, which develops an AI assistant for household tasks, seeks to raise $1.5 million in a private placement of equity in her early-stage venture. Nadya...
-
Excess Cash $110,860,000, Amazon current market price $174.58 how many shares could amazon purchase at the current market price
-
Describe how financial forecasting was used to work on pro forma operating budget for nurse retention project
-
Which of the following statements is most likely accuraterelating to greenhouse gases? a. The increase in average temperature of the Earth's atmosphereparallels the increase in carbon dioxide...
-
In the figure, two loudspeakers, separated by a distance of d1 = 2.63 m, are in phase. Assume the amplitudes of the sound from the speakers are approximately the same at the position of a listener,...
-
Dime a Dozen Diamonds makes synthetic diamonds by treating carbon. Each diamond can be sold for $ 100. The materials cost for a standard diamond is $40. The fixed costs incurred each year for factory...
-
Reconsider the project in Problem 26. What is the project IRR? What is the cost of capital for the project? Does the accept-reject decision using IRR agree with the decision using NPV?
-
True or false? a. The financial crisis was largely caused by banks taking large positions in the options and futures markets. b. The prime cause of the financial crisis was an expansion in bank...
-
The solar system is like an atom in that both (a) are governed principally through the electric force. (b) consist of a central body surrounded by objects moving in elliptical paths. (c) are composed...
-
When a contracting hot ball of gas spins into a disk shape, it cools faster due to (a) increased radiation transfer. (b) increased surface area. (c) decreased insulation. (d) increased convection...
-
Compared to your weight on Earth, your weight on Jupiter would be about (a) 3000 times as much. (b) half as much. (c) 3 times as much. (d) 300 times as much. (e) 100 times as much.
Study smarter with the SolutionInn App