International Accounting and Finance Degree BAB231 Study Guide - Final Guide: Intentional Tort, Contributory Negligence, Legal Personality
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Your grandfather has offered you a choice of one of the three following alternatives: $9,500 now; $4,000 a year for seven years; or $51,000 at the end of seven years. Use Appendix B and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods.
a-1. Assuming you could earn 11 percent annually, compute the present value of each alternative: (Do not round intermediate calculations. Round your final answers to 2 decimal places.)
a-2. Which alternative should you choose?
$51,000 received at end of seven years | |
$4,000 received each year for seven years | |
$9,500 received now |
b-1. If you could earn 12 percent annually, compute the present value of each alternative: (Do not round intermediate calculations. Round your final answers to 2 decimal places.)
b-2. Which alternative should you choose?
$51,000 received at end of seven years | |
$4,000 received each year for seven years | |
$9,500 received now |
Your grandfather has offered you a choice of one of the three following alternatives: $9,000 now; $3,800 a year for six years; or $46,000 at the end of six years. Use Appendix B and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods. |
a-1. | Assuming you could earn 10 percent annually, compute the present value of each alternative: (Do not round intermediate calculations. Round your final answers to 2 decimal places.) |
Present Value | |
$9,000 | $ |
$3,800 | $ |
$46,000 | $ |
a-2. | Which alternative should you choose? | ||||||
|
b-1. | If you could earn 11 percent annually, compute the present value of each alternative: (Do not round intermediate calculations. Round your final answers to 2 decimal places.) |
Present Value | |
$9,000 | $ |
$3,800 | $ |
$46,000 | $ |
b-2. | Which alternative should you choose? | ||||||
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