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Net Present Value, Stock Dividend, and Accumulated Value

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A. How much can be accumulated for retirement if $2,000 is deposited annually, beginning one year from today, and the account earns 9% interest compounded annually for 40 years?

B. After the payment of a 25% stock dividend, and investor has 500 shares of stock and $400 total value. What did the investor have prior to the stock dividend?

C. What is the NPV of a project that cost $100,000 and returns $45,000 annually for three years if the opportuntity cost of capital is 14%?

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The solution has questions relating to future value of annuity, stock dividend and NPV

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A. How much can be accumulated for retirement if $2,000 is deposited annually, beginning one year from today, and the account earns 9% interest compounded annually for 40 years?

The amount deposited is an annuity and we have to find the future value. The Future Value of an annuity can be found using the FVIFA ...

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