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

This preview shows pages 1–2. Sign up to view the full content.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

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 ...
View Full Document

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

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online