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4considerthefollowingtimelinedetailingastreamofcashflo

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Unformatted text preview: D) $77 2) It has long been told that the Dutch purchased Manhattan island in 1626 for the value of 60 guilders ($24). Assuming that the Dutch invested this money into an account earning 5%, approximately how much would their investment be worth 380 years later in 2006? A) $2.7 billion B) $3.1 billion C) $4.5 billion D) $1.9 trillion 2) Which of the following statements is false? A) PV FV = (1 + r )n N B) Cn PV = (1 + r )n n =0 ∑ N C) FV = ∑ Cn × (1 + r)n n =0 D) Most investment opportunities have multiple cash flows that occur at different points in time. 4) Consider the following timeline detailing a stream of cash flows: If the current market rate of interest is 10%, then the present value of this stream of cash flows is closest to: A) $674 B) $600 C) $460 D) $287 Joe just inherited the family business, and having no desire to run the family business, he has decided to sell it to an entrepreneur. In exchange for the family business, Joe has been offered an immed...
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