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Unformatted text preview: accomplish this goal, she will invest P at the end of 10 years in an account that earns compound interest of 20%. Determine P. 34. Calculate the present value of 1000 payable at the end of 15 years assuming compound interest at an annual effective rate of 9.5%. 35. The accumulated value of $1 invested 2 years ago less the present value of $1 to be paid in two years is equal to (4641/12100). Calculate i. 37. Kendrick Corporation invests X million today to build a factory. The factory is expected to produce the following profits: At the end of 4 years, the factory will be obsolete and will be closed. The Net Present Value of this project to Kendrick Corporation is 1 million at an interest rate of 8%. Calculate the Internal Rate of Return on this project. Answer: 27. 0.38760 28. 28. 8064.52 29. 7920.94 30. 2.5 31. 500 32. 30,000 33. 8075.28 34. 256.32 35. 10% 36. NPV=6.74 and IRR=17.2923% 37. 15.913%...
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This note was uploaded on 02/04/2012 for the course MA 373 taught by Professor Staff during the Spring '08 term at Purdue.
- Spring '08