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Business

Finance

4.8

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 11EA: How much would you invest today in order to receive $30,000 in each of the following (for further...

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Concept explainers

Market Efficiency

Market efficiency refers to the market's ability to provide investors with all available information about investment options for buying and selling securities. Market efficiency reflects the true value of securities without undervaluing or overvaluing them. When the quality and quantity of information increase, the market becomes more efficient, allowing it to reduce arbitrage and obtain higher market returns from investment. In a well-functioning market, everyone receives all information completely and immediately at no cost. It opens up a plethora of opportunities for investors to access various investment options.

Question

What is the Present Value of $10,000 to be received 15 years from today at 7.0%

Question 8 options:

	5,314.80
	6,229.81
	3,624.46
	4,218.59
	2,851.43

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Step 1 Present Value = Discounted Future value FV =

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Step 2= 10000/ 2.759

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