An investment will pay you $8,000 in 9 years, and it will also pay you $260 at the end of each of the next 9 years (years 1 through 9). If the annual interest rate is 5%, how much would you be willing to pay today for this type of investment? (Round your intermediate calculations and final answer to the nearest whole dollar.) What is the present value?

On January 1, 2014, Alan King decided to transfer an amount from his checking account into a savings account so that he will have $60,000 to send his son to college 5 years from now. The savings account will earn 8 percent interest.

How much must Alan deposit on January 1, 2014, in order to reach his goal?

Given a 6 percent interest rate, compute the present value of payments made in years 1, 2, 3, and 4 of $1,700, $2,000, $2,000, and $2,100. (Do not round intermediate calculations and round the final answer to 2 decimal places.)

The projected net cash flows for an investment are (in Pound ‘000):

Y0: -950

Y1: 130

Y2: 200

Y3: 330

Y4: 270

Y5: 180

What is the net present value of the investment, assuming a 9% cost of capital and an 820 initial investment?

You are thinking of building a new machine that will save your company $1,000 in the first year. The machine will then begin to wear out so that the savings decline at a rate of 2% per year forever.

What is the present value of the savings if the interest rate is 5% per year?

A project has an initial outlay of $1,766. It has a single payoff at the end of year 10 of $9,038. What is the net present value (NPV) of the project if the company’s cost of capital is 13.30 percent?