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mgmt109 hw1 - James Weinstock#67573931 Mgmt 109 October 9...

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James Weinstock #67573931 Mgmt 109 October 9, 2011 Homework 1 5.3 calculating present values -pv=FV/(1+R)^T Present value Years Interest rate Future values 10,295.7 6 7% 15,451$ 219,14.9 7 13 51,557 425,34.7 23 14 866,073 116,631 18 9 550164 5.7 At 7 % interest, how long does it take to double your money? Quadruple? a. around 10 years b. 5.11 You have just received notification that you have won the 1 million first prize in the centennial lottery. However, the prize will be awarded on your 100 th birthday, 80 years from now. What is the present value of your windfall if the appropriate discount rate is 10 percent? -PV=FV/(1+r)^T PV=1,000,000/(1.10)^80 PV= 488.186$ 5.14 In 2008, a gold Morgan dollar minted in 1895 sold for 43,125$. For this to have been true, what rate of return did this coin return for the lucky numismatist? -FV=PV(1+r)^T 43,125=(1+r)^113 43125^(1/113)-1 = R =9.9 % 6.1 seaborn co has identified an investment project with the following cash flows. If the discount rate is 10 %, what is the present value of these cash flows? What is the present
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