Investment X offers to pay you $4,300 per year for 9 years, whereas Investment Y offers to pay you $6,100 per year for 5 years. a. If the discount rate is 6 percent, what is the present value of these cash flows?

Present value of investment X=$29,247.28

Present value of investment Y=$25,695.42

Explanation:

Since the investment X is paying the $4,300 per year for the period of the 9 years, therefore, the present value of the cash flows pertaining to the investment X shall be determined through present value of annuity formula as follows:

Present value of investment X=R[1-(1+i)^-n/i}

Where

R=amount that investment X is giving per year=$4,300

i= Interest rate per year=6%

n=number of years=9

Present value of investment X=$4,300[1-(1+6%)^-9/6%}=$29,247.28

Since the investment Y is paying the $6,100 per year for the period of the 5 years, therefore, the present value of the cash flows pertaining to the investment Y shall be determined through present value of annuity formula as follows:

Present value of investment Y=R[1-(1+i)^-n/i}

Where

R=amount that investment Y is giving per year=$6,100

i= Interest rate per year=6%

n=number of years=5

Present value of investment Y=$6,100[1-(1+6%)^-5/6%}=$25,695.42

explanation: doctrine of respondeat superior is a legal doctrine that is commonly used in tort. this principle makes an employer or principal legally responsible for the wrongful acts done by an employee or agent, if such acts occur within the scope of the employment or agency.