12 - 6 Course Hero | Upload Error X McGraw-Hill's Connect...

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Unformatted text preview: 6 Course Hero | Upload Error X McGraw-Hill's Connect (- C‘ Oconnectmcgraw—hi||.tomiconnecL’studenPerformancedoheoorfllaTie:Studentl-E203rsrformancedsectéonld:3256488&reoonTyoe:si'ngi'eStudentSe'ngieAssTgnm assignment results: Williams, Brittany (J Harris - FIN 314- - Section 6 - TR 1200-115} assignment: Homework: Chapter4 Attempt1 [of 2] D 10 ouloflll points {100%} we I m r award: 1 out of required return is 10 percent, the present value of the investment is $ 27,243.40 0. If the payments occurred for 30 years, the present value of the investment would he $ 30,165.13 0. If the payments occurred for 75 years, the present value of the investment would he $ 31,974.84 0. lithe payments last forever, the present value would he $ 32,000.00 OlDo not include the dollar signs {5}. Round your show answers to 2 decimal places. {e.g., 32.16» ECII'I'EGI answer Ell] A” .. Worksheet Dimoully: Basic f |'|'|' lg} ProjectPlanGradeS....docx ' @ F10_Project_P|an_in....door ' Lil; TeamSandlot_26_Fa||....zip ' @ Reflectionsfieportdocx ' lfi exam_1.doc I 5 Course Hero| Upload Error x’ McGraw-Hill's Connect (- C‘ Oconnectmcgraw-hill.comlconnectlstudentJerlor'nanceoolreoortva'ne=StudentfiéZUJerfor.nance&sect'onld=3256488&reoortTyoe=s'ng'eStudentan9A5s'gn’nenthtu-VlodeIii ‘3‘ To find the PVA, we use the equation: lfl PVA = sin — [on + rl‘] }lr] PVA @ 23 yrs: PVA = 33,2no{[1 - (331.3320) 13.30} = $27,243.40 PVA@3ll yrs: PVA =33,2uo{[1 - (333103") 13.30: = $30,135.33 PVA@75 yrs: PVA = $3,20ll{[l - (ll1.1ll75l]l.lll} =$3l,974.64 To find the PV of a perpetuity, we use the equation: PV = Glr PV =53,2lllll.ll] PV =$32,llll.llll Notice that as the length of the annuity payments increases, the present value ol the annuity approaches the present value of the perpetuity. The present value of the 75-year annuity and the present value of the perpetuity imply that the value today of all perpetuity payments beyond 75 years is only $25.15. Calculator Solution: __ _I H II W II PV II PMT II W I ____ _ 33,233 _ - llY I. W II Pm II Hi I $30,165.13 __ PV II Pm II FV $33,974.84 __ l | in | y [El] ProjectPlanGradeSmdoDc ' F10_Project_Plan_in....door ' Lil] TeamSandlot_26_Fall...rzip ' Rellecttonsfieportdocx ' exarn_1.doc ' ‘Shnwalldownloads... X 5:10PM—T meson ‘ I} .--II ...
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12 - 6 Course Hero | Upload Error X McGraw-Hill's Connect...

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