Question 6 Next year you will begin receiving $173 per year in perpetuity from a...
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Question 6 Next year you will begin receiving $173 per year in perpetuity from a family trust fund (first payment is exactly 1 year from today). You have decided to discount these cash flows at a constant interest rate of 5.8%. What is the present value today of these future cash flows? (Hint: draw a time line to illustrate exactly the cash flows for this problem.) Answer to 2 decimal places.
Question 7 What is the PV of a 13-year annuity due (payments at beginning of period, aka annuity in advance) of $681 if the required return is 10.3% Answer to 2 decimal places.
Question 8 In 10 years you will begin receiving $179 per year in perpetuity from a family trust fund (first payment is exactly 10 years from today). You have decided to discount these cash flows at a constant interest rate of 6.5%. What is the present value today of these future cash flows? (Hint: draw a time line to illustrate exactly the cash flows for this problem.) Answer to 2 decimal places.
Question 9 How long does it take a present value amount to triple if the expected return is 9.1%? Answer to 2 decimal points.
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