What is the equivalent worth at the end of period 4 of 4 uniform per period...

What is the equivalent worth at the end of period 4 of 4 uniform per period amounts of 600 starting at the end of period 1 followed after that ends by 7 uniform period amounts of 800 using an interest rate of 7.00%.

Expert Solution

The cashflow can be given as follows. The second row contains the formula used.

Since the equivalent worth is to be found out at the end of Period 4, so the time to be considered is subtracted from 4. So The cashflow at end of year 1 is compunded for 3 years, the one at end of year 2 is compounded for 2 years.

The ones after year 4, i.e. the one at end of 5 years is compounded for -1 year which is the same as being discounted for 1 year.

The one at end of year 6 is discounted for 2 years and so on.

The equivalent worths of every cashflow is calculated at end of year 4 and added up.

End of Year	Time to be considered	Cashflow	Rate of Interest	EW
A	B=4-A	C	D	*E=C(1+D)^B**
1	3	600	7%	735.03
2	2	600	7%	686.94
3	1	600	7%	642.00
4	0	600	7%	600.00
5	-1	800	7%	747.66
6	-2	800	7%	698.75
7	-3	800	7%	653.04
8	-4	800	7%	610.32
9	-5	800	7%	570.39
10	-6	800	7%	533.07
11	-7	800	7%	498.20
			Total	6975.40

equivalent worth at the end of period 4 is 6975.40

If you found this helpful, please rate it so that I can have higher earnings at no extra cost to you. This will motivate me to write more.

Rahul Sunny answered 7 months ago

Question 11 pts The interest rate at which the present worth and the equivalent uniform annual...

Question 11 pts The interest rate at which the present worth and the equivalent uniform annual worth are equal to 0 is called the internal rate of return. True False Question 21 pts To determine the internal rate of return, you can calculate net present worth at varying interests and select the interest rate where NPW = 0. True False Question 31 pts If the internal rate of return of a project is less than your MARR, then the project...

For the cash flows shown, determine the equivalent uniform annual worth in years 1 through 5...

For the cash flows shown, determine the equivalent uniform annual worth in years 1 through 5 at an interest rate of 18% per year, compounded monthly. Year 1 2 3 4 5 Cash Flow, $ 0 0 350,000 350,000 350,000 The equivalent uniform annual worth in years 1 through 5 at an interest rate of 18% per year, compounded monthly is $

Determine the equal , end of period , annual worth of a process which will involve...

Determine the equal , end of period , annual worth of a process which will involve an initial outlay of $80000 followed by costs of $12000 at the end of year1 and amounts increasing by $1200 per year through its 12 year life. Assume that the interest rate is 10% per year.

What is cost per equivalent?

XYZ company uses the weighted-average method in its process costing system. Data for assembly department for April is as follows - Materials Work in process, 1 may = $36000 Cost aded during April = $200000 Equivalent units of production = 4000 Calculate the cost per equivalent unit for material?

What is the effective rate of interest per semi-annual period equivalent to 8% p.a. compounding annually?

What are the steps to this question: What uniform annual payment for 30 years is equivalent...

What are the steps to this question: What uniform annual payment for 30 years is equivalent to spending $10,000 immediately, $10,000 at the end of 10 years, $10,000 at the end of 20 years, and $2,000 a year for 30 years? Assume an interest rate of 9%. (Ans. $3,558.22)

An interest rate of 21% per year, compounded every 4 months, is equivalent to what effective...

An interest rate of 21% per year, compounded every 4 months, is equivalent to what effective rate per year? Show spreadsheet solutions

"Machine A costs $27,000 to purchase and is worth $9,000 in 4 years at the end...

"Machine A costs $27,000 to purchase and is worth $9,000 in 4 years at the end of its service life. Machine B costs $20,000 to purchase and is worth $1,000 in 4 years at the end of its service life. Assume that these machines are needed for 4 years (required service period). Each machine can be repurchased at the same price in the future, and assume the annual maintenance cost of each machine is negligible. Use 10% annual interest rate....

What uniform annual payment for 30 years is equivalent to spending $10,000 immediately, $10,000 at the...

What uniform annual payment for 30 years is equivalent to spending $10,000 immediately, $10,000 at the end of 10 years, $10,000 at the end of 20 years, and $2,000 a year after 30 years? Assume an interest rate of 9% *for 30 years

What is the equivalent annual worth of a 20-year project that has a $2 million initial...

What is the equivalent annual worth of a 20-year project that has a $2 million initial cost, annual operating costs of $54,652 and annual benefits of $274,189? Assume a discount rate of 9.0%. Enter your answer in the box below in units of $.

Question