ACC 102 Lecture 7: Additional problems for Exam 1

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28 Jan 2019
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Both investments have the same future cash flows. Investment a has a discount rate of 4%, and investment b has a discount rate of 5%. Investment b: no comparison can be made we need to know the cash flows to calculate the present value, investment x and investment y are both growing perpetuities with initial cash flow of . Both investments have the same interest rate and cash flows. X is ,000, while the present value of investment y is ,000. With the same cash flow and the interest rate, Investment y have the same present value. should. Pv 5000 > 4000: the annual percentage rate indicates the amount of interest, including the effect of any compounding. You are offered an investment plan that will pay you 8 percent per year for the next 15 years and 10 percent per year for the last 25 years.

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