Your grandfather would like to share some of his fortune with you. He offers to give...

   

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Your grandfather would like to share some of his fortune with you. He offers to give you money under one of the following scenarios (you get to choose): Use the Present Value of $1 or the Present Value of Ordinary Annuity of $1 tables from above. Round final present value to the nearest whole number. When calculating the present values, be sure to use the full present value factor or annuity factor to 3 decimal places in your calculations. Note that the answer key will show the values rounded to 2 decimal places due to display limitations. A. Calculate the present value of each scenario using an 1% discount rate and rank your choices. Present Value of $1 7.00 % 0.935 Periods 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 0.990 0.980 0.971 0.962 0.952 0.943 0.980 0.961 0.943 0.907 0.907 0.890 0.873 0.971 0.942 0.915 0.864 0.864 0.840 0.792 0.735 0.708 0.683 0.763 0.713 0.681 0.650 0.621 0.747 0.705 0.666 0.630 0.596 0.564 0.961 0.924 0.888 0.855 0.823 0.951 0.906 0.863 0.822 0.784 0.942 0.888 0.837 0.790 0.746 0.933 0.871 0.813 0.760 0.711 0.665 0.623 0.583 0.547 0.513 0.923 0.853 0.789 0.731 0.677 0.627 0.582 0.540 0.502 0.467 0.914 0.837 0.766 0.703 0.905 0.820 0.744 0.676 0.645 0.592 0.544 0.500 0.460 0.424 0.614 0.558 0.508 0.463 0.422 0.386 1 2 3 4 5 6 7 8 9 10 Periods 1.00% 2.00% 1 2 3 4 5 6 7 8 9 10 8.00 % 9.00% 10.00% 0.926 0.917 0.909 0.857 0.842 0.826 0.816 0.794 0.772 0.751 Present Value of Ordinary Annuity of $1 1.783 1.759 1.736 3.00 % 4.00% 5.00% 6.00% 7.00 % 8.00 % 9.00% 10.00% 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 1.970 1.942 1.913 1.886 1.859 1.833 1.808 2.723 2.673 2.624 2.577 2.531 2.487 3.630 3.546 3.465 3.387 3.312 3.240 3.170 4.452 4.100 3.993 3.890 3.791 4.767 4.623 4.486 4.355 2.941 2.884 2.829 2.775 3.902 3.808 3.717 4.853 4.713 4.580 4.329 4.212 5.795 5.601 5.417 5.242 5.076 4.917 5.786 5.582 5.389 5.206 5.033 4.868 6.002 6.733 6.463 6.210 5.971. 5.747 5.535 5.335 6.728 6.472 6.230 7.652 7.325 7.020 8.566 8.162 7.786 7.435 7.108 6.515 6.247 5.995 5.759 9.471 8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 6.802 1) $8,930 per year at the end of each of the next 4 year(s). Amount of Cash X Annuity Factor Present Value 2) $42,350 (lump sum) now. Present Value 3) $71,800 (lump sum) 4 year(s) from now. Rank 1-3 (1 = best choice) Amount of Cash X Present Value Factor Present Value Amount of Cash X Annuity Factor Present Value B. Calculate the present value of each scenario using an 1% discount rate and rank your choices. 1) $8,930 per year at the end of each of the next 4 year(s). 2) $42,350 (lump sum) now. Present Value 2/26/23 1:23 PM Rank 1-3 (1 = best choice) 3) $71,800 (lump sum) 4 year(s) from now. Rank 1-3 (1 = best choice) X Rank 1-3 (1-best choice) Amount of Cash X Present Value Factor Present Value Rank 1-3 (1= best choice) Rank 1-3 (1-best choice) 421 Your grandfather would like to share some of his fortune with you. He offers to give you money under one of the following scenarios (you get to choose): Use the Present Value of $1 or the Present Value of Ordinary Annuity of $1 tables from above. Round final present value to the nearest whole number. When calculating the present values, be sure to use the full present value factor or annuity factor to 3 decimal places in your calculations. Note that the answer key will show the values rounded to 2 decimal places due to display limitations. A. Calculate the present value of each scenario using an 1% discount rate and rank your choices. Present Value of $1 7.00 % 0.935 Periods 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 0.990 0.980 0.971 0.962 0.952 0.943 0.980 0.961 0.943 0.907 0.907 0.890 0.873 0.971 0.942 0.915 0.864 0.864 0.840 0.792 0.735 0.708 0.683 0.763 0.713 0.681 0.650 0.621 0.747 0.705 0.666 0.630 0.596 0.564 0.961 0.924 0.888 0.855 0.823 0.951 0.906 0.863 0.822 0.784 0.942 0.888 0.837 0.790 0.746 0.933 0.871 0.813 0.760 0.711 0.665 0.623 0.583 0.547 0.513 0.923 0.853 0.789 0.731 0.677 0.627 0.582 0.540 0.502 0.467 0.914 0.837 0.766 0.703 0.905 0.820 0.744 0.676 0.645 0.592 0.544 0.500 0.460 0.424 0.614 0.558 0.508 0.463 0.422 0.386 1 2 3 4 5 6 7 8 9 10 Periods 1.00% 2.00% 1 2 3 4 5 6 7 8 9 10 8.00 % 9.00% 10.00% 0.926 0.917 0.909 0.857 0.842 0.826 0.816 0.794 0.772 0.751 Present Value of Ordinary Annuity of $1 1.783 1.759 1.736 3.00 % 4.00% 5.00% 6.00% 7.00 % 8.00 % 9.00% 10.00% 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 1.970 1.942 1.913 1.886 1.859 1.833 1.808 2.723 2.673 2.624 2.577 2.531 2.487 3.630 3.546 3.465 3.387 3.312 3.240 3.170 4.452 4.100 3.993 3.890 3.791 4.767 4.623 4.486 4.355 2.941 2.884 2.829 2.775 3.902 3.808 3.717 4.853 4.713 4.580 4.329 4.212 5.795 5.601 5.417 5.242 5.076 4.917 5.786 5.582 5.389 5.206 5.033 4.868 6.002 6.733 6.463 6.210 5.971. 5.747 5.535 5.335 6.728 6.472 6.230 7.652 7.325 7.020 8.566 8.162 7.786 7.435 7.108 6.515 6.247 5.995 5.759 9.471 8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 6.802 1) $8,930 per year at the end of each of the next 4 year(s). Amount of Cash X Annuity Factor Present Value 2) $42,350 (lump sum) now. Present Value 3) $71,800 (lump sum) 4 year(s) from now. Rank 1-3 (1 = best choice) Amount of Cash X Present Value Factor Present Value Amount of Cash X Annuity Factor Present Value B. Calculate the present value of each scenario using an 1% discount rate and rank your choices. 1) $8,930 per year at the end of each of the next 4 year(s). 2) $42,350 (lump sum) now. Present Value 2/26/23 1:23 PM Rank 1-3 (1 = best choice) 3) $71,800 (lump sum) 4 year(s) from now. Rank 1-3 (1 = best choice) X Rank 1-3 (1-best choice) Amount of Cash X Present Value Factor Present Value Rank 1-3 (1= best choice) Rank 1-3 (1-best choice) 421

Answer rating: 100% (QA)

If interest rate is 6 Scenario 1 Present Value 8750 PVA of 1 6 6 ... View the full answer