# Essay about Present Value Applications

645 Words 3 Pages
Present Value Applications

2. You are given a choice of being paid either \$18,000 now or \$20,000 two years from now.
Which would you rather have, assuming you could earn 10% interest on any cash you have now?

18,000(121) = 21,780
It would be better to have 18,000 now than to have 20,000 in 2 years.

4. Would you be better off accepting \$27,000 now or \$10,000 at the end of each of the next three years, assuming that you can earn interest at 1) 6%? or 2) 4%?

6% 27,000(1.19102) = \$32,157.54
4% 27,000(1.12486) = \$30,371.22

6% 10,000(3.1836) = \$31,836.00
4% 10,000(3.1216) = \$31,216.00
If you can get 6% interest rate, then it is better to accept \$27,000, but if you can only get 4% then it is better to accept \$10,000.

6.
0 2,000 3,000 3,000
4 1,000 1,000 2,000 2,000 3,000 3,000
5 1,000 0 2,000 2,000 3,000 0
6 0 0 0 5,000 4,000 5,000

A)
10% \$1,000(3.7908 – 0.9091) = \$2881.70
15% \$1,000(3.3522 – 0.8696) = \$2,482.60

B)
10% \$1,000(3.3522) = \$3,169.90
15% \$1,000(0.8696) = \$2,855.00

C)
10% \$2,000(2.4869) = \$4,973.80 + \$1,500 = \$6,473.80(0.9091) = \$5,275.34 + \$1,500 = \$7,385.33
15% \$2,000(2.2832) = \$4,566.40 + \$1,500 = \$6,066.40(0.8696) = \$5,275.34 + \$1,500 = \$6,775.34

D)
10% \$2,000(3.7908 – 0.9091) = \$5,599.96 + (\$5,000(0.5645 – 0.9109)) = \$7,331.96
15% \$2,000(3.3522 – 0.8696) = \$4,965.20 + (\$5,000(0.8696 – 0.4323)) = \$7,151.70

E)
10% \$3,000(3.1699) = \$9,509.70 + \$4,000 = \$13,509.70 + (\$4,000(0.6209)) = \$15,993.30
15% \$3,000(2.8550) = \$2,483.60 + \$4,000 = \$12,565.00 + (\$4,000(0.4323)) = \$14,294.20

F)
10% \$5,000(0.5645) = \$2,822.50 + (\$3,000(2.4869)) = \$10,283.20 + \$1,000 = \$11,283.20
15% \$5,000(0.4323) = \$2,161.50 + (\$3,000(2.2832)) = \$9,011.10 + \$1,000 =

## Related Documents

• ###### Asdw Essay

and quadratic equations, Application of equations: profit, pricing, savings, revenue, sales tax, investment, bond redemption, linear inequalities, applications of inequalities: profit, renting verses purchasing, leasing versus purchasing, revenue, current ratio, investment, Maple session on solving linear, quadratic and higher degree equations, solving inequalities II. Functions and Graphs: Introduction to functions, domain and range of a function, Applications: demand, supply and profit…

Words: 857 - Pages: 4
• ###### Essay Chapter 11 : Application Portfolio Management

Chapter 11: Application Portfolio Management 1. The CIO is concerned about the ever increasing cost of maintaining the inventory of IT applications in the organization. He has asked you to meet to discuss why this proliferation of applications is occurring? One of the main causes of the ever-growing costs of upholding different technologies, is simply that they are not being disposed when they are stop being relevant. A number of these applications provide obsolete functionality or are redundant…

Words: 709 - Pages: 3
• ###### Essay Public Finance Principle : The Free Rider Problem

a way to level the playing field in terms of funding the programs, but in the end, there would be other consequences, such as private insurance company failures and a potential change in the care the public is allowed. 2. Government practice application: The Fair Credit Reporting Act is an example of a government practice (regulation) put into place to help protect the consumer by requiring fair practices of reviewing credit, accuracy in credit reporting and privacy of information in the files…

Words: 1614 - Pages: 7
• ###### Bus 644 Complete Week 6 / Final Paper and Dqs

beneficial to the company or add value for the customer? What are they? The purpose of the Final Case is for you to culminate the learning achieved in the course by describing your understanding and application of knowledge in the field of operations management. The paper should integrate Readings and Resources and class discussions into work and life experiences. It may include explanation and examples from previous events as well as implications for future applications. Guidelines for Writing the…

Words: 1398 - Pages: 6
• ###### Essay Wireless Technology

technology for large-scale ubiquitous computing applications Anis Koubâa, Mario Alves, Eduardo Tovar PP-HURRAY! Research Group, Polytechnic Institute of Porto Rua Dr. Antonio Bernardino de Almeida, 431, 4200-072 Porto, PORTUGAL {akoubaa, emt}@dei.isep.ipp.pt, mjf@isep.ipp.pt Abstract. Wireless Sensor Networks (WSNs) have been attracting increasing interest for supporting a new generation of ubiquitous computing systems with great potential for many applications such as surveillance, environmental monitoring…

Words: 5264 - Pages: 22
• ###### Essay Malware And Botnets : Malware

Android Malware and Botnets Malware in differing forms has been present since computers were first invented. One of the most interesting kinds of malware is that which takes control of a computer and reports back to the malicious actor that infected the computer. The malware allows an attacker to use the infected computer, effectively making the computer a bot. Normally, these bots are part of a network of infected computers known as a botnet. The attacker in control of a botnet can use it for a…

Words: 2049 - Pages: 9
• ###### Essay The Federal Enterprise Architecture Framework

reference model d) application reference model e) infrastructure reference model f) security reference model. 3.Related Work 3.1Introduction Mainly, the enterprise architecture is the important part of the enterprise mission for reducing the costs and various risks. Indeed, this leads to increase in the a) efficiency, b) profits and c) effectiveness [1]. Moreover, with the use of the benchmark application it speeds the entire process. Furthermore, with the benchmark application, it is easy to know…

Words: 960 - Pages: 4
• ###### Myers, S.C. (1984). “Finance Theory and Financial Strategy”. Interfaces, 14.

financial analysis are not reconciled. When low net present value (NPV) projects are nurtured "for strategic reasons," the strategic analysis overrides measures of financial value, and vice versa. Relevant Financial Theory The financial concepts most relevant to strategic planning are those dealing with firms' capital investment decisions. To select the projects to be financed, we calculate net present value by subtracting project’s present value with required investments. Projects with positive…

Words: 782 - Pages: 4
• ###### Circular Flow Chart Essay

Course Description Managerial Economics is concerned with resources allocation, decisions that are made by managers in both private and public sections (private business, private NGO’s and public sector) of the economy. The course emphasizes the application of economic principles and methodologies to decision-making process of business firms operating under conditions of risk and uncertainty. Managerial Economics, thus, uses concepts, models and analytical techniques of economics to study and analyse…

Words: 2800 - Pages: 12
• ###### Recruiting and Attracting Talent Essay

hiring process (Heneman, Judge, & Kammeyer-Mueller, 2012). Methods available to pre-screen candidates include application blanks, resume screening, biodata evaluations, reference reporting, and initial interviews (Heneman, Judge, & Kammeyer-Mueller, 2012). These processes assist in weeding out applicants who are not serious or qualified for a position. Application Blanks Application blanks serve to quickly assess if a candidate has the desired background, education, experience, or skills required…

Words: 1135 - Pages: 5