What is the present value of $100.00 expected two years from today at a discount rate of 6%?

a.
This is the usual perpetuity, and hence:
PV=C/r=200/0.05=4000

b.
This is worth the PV of stream (a) plus the immediate payment of $200:
PV = $200 + $4,000.00 = $4,200.00

c.
The continuously compounded equivalent to a 5% annually compounded rate is approximately 4.88%, because:

Ln(1.05) = 0.0488
or
e0.0488 = 1.05

Thus:

PV=C/r=200/0.0488=4099.19

Note that the pattern of payments in part (b) is more valuable than the pattern of payments in part (c). It is preferable to receive cash flows at the start of every year than to spread the receipt of cash evenly over the year; with the former pattern of payment, you receive the cash more quickly.

1.value:10.00 pointsThe present value of $100 expected two years from today at a discount rate of 6 percent is$112.36.$106.00.$100.00.$89.00.

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3.value:10.00 pointsIf the annual interest rate is 12 percent, what is the two-year discount factor?

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4.Award:10 out of 10.00 pointsIf the present value of cash flow X is $240 and the present value of cash flow Y is $160, then thepresent value of the combined cash flows is

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5.Award:10 out of 10.00 pointsThe rate of return is also called thediscount rate only.discount rate and hurdle rate only.discount rate, hurdle rate, and opportunity cost of capital.discount rate and opportunity cost of capital only.

6.Award:10 out of 10.00 pointsThe present value of $121,000 expected one year from today at an interest rate (discount rate) of 10percent per year is

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7.Award:10 out of 10.00 pointsThe one-year discount factor, at a discount rate of 25 percent per year, is

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8.Award:10 out of 10.00 pointsThe one-year discount factor, at an interest rate of 100 percent per year, is

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9.Award:10 out of 10.00 pointsThe present value of $100,000 expected at the end of one year, at a discount rate of 25 percent peryear, is$80,000.$125,000.$100,000.$75,000.PV = (100,000)/(1 + 0.25) = 80,000.

10.Award:10 out of 10.00 pointsIf the one-year discount factor is 0.8333, what is the discount rate (interest rate) per year?

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11.Award:10 out of 10.00 pointsIf the present value of $480 to be paid at the end of one year is $400, what is the one-year discountfactor?

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12.Award:10 out of 10.00 pointsIf the present value of $250 expected one year from today is $200, what is the one-year discountrate?

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13.Award:10 out of 10.00 pointsIf the one-year discount factor is 0.90, what is the present value of $120 expected one year fromtoday?$100$96$108$133PV = (120)(0.90) = 108.

14.Award:10 out of 10.00 pointsIf the present value of $600, expected one year from today, is $400, what is the one-year discountrate?

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What is the present value of 1000$ to be received after 2 years at a discount of 10 %?

The present value of the amount to be received is $613.91.

What is the present value of $121000 expected one year from today at an interest rate discount of 10% per year?

discount rate, hurdle rate, and opportunity cost of capital. The present value of $121,000 expected one year from today at an interest rate (discount rate) of 10 percent per year is C. $110,000.

What is the present value of $100 received one year from now if the interest rate is 6 %?

$100 today at 6% interest is worth $100 * 1.06 = $106 next year. The present value of an amount is what it is worth today.

How do you find the present value of a discount rate?

The present value of a cash flow (i.e. the value of future cash in today's dollars) is calculated by multiplying the cash flow for each projected year by the discount factor, which is driven by the discount rate and the matching time period.