Question
In: Finance
Consider the following cash flows and interest rates: End of Year Interest Rate During Period Cash...
Consider the following cash flows and interest rates:
End of Year Interest Rate During Period
Cash Flow at End of Period
0 $0
1 10% $2,000
2 8% −$3,000
3 12% $4,000
A. Determine the future worth of this series of cash flows.
B. Determine the present worth of this series of cash flows.
C. Determine a 3-year uniform annual series that is equivalent to
the original series.
Solutions
Expert Solution
1.
=2000*1.08*1.12+3000*1.12+4000=9779.20
2.
=4000/(1.12*1.08*1.1)+3000/(1.08*1.1)+2000/1.1=7349.68734968735
3.
=(4000/(1.12*1.08*1.1)+3000/(1.08*1.1)+2000/1.1)/(1/(1.12*1.08*1.1)+1/(1.08*1.1)+1/1.1)=2937.04949543489
jeff jeffy answered 2 years agoRelated Solutions
Consider the following table containing unemployment rates for a 10-year period. Unemployment Rates Year Unemployment Rate...
Consider the following table containing unemployment rates for a
10-year period.
Unemployment Rates
Year
Unemployment Rate (%)
1
3.5
2
5.2
3
7.8
4
8.1
5
3.7
6
9.6
7
8.7
8
3.5
9
11.1
10
8.8
What is the coefficient of determination for the regression
model? Round your answers to two decimal places.
Calculate the net present value at year 0 for the following cash flows and interest rates...
Calculate the net present value at year 0 for the following cash
flows and interest rates compounded semi-annually (rounded $ to two
places after the decimal). The year 0 cash flow is $373, the year 1
cash flow is $200, and the year 2 cash flow is $-147. The interest
rate for the first period (year 0 to 1) is 3% and the interest rate
for the second period (year 1 to 2) is 4.5%.
A. What is the payback period for the following set of cash flows? Year Cash...
A.
What is the payback period for the following set of cash
flows?
Year
Cash Flow
0
−$ 5,300
1
2,300
2
2,300
3
1,400
4
1,100
B.
A project with an initial cost of $22,350 is expected to
generate cash flows of $5,200, $7,300, $8,400, $7,300, and $6,000
over each of the next five years, respectively. What is the
project's payback period?
C.
A new project has an initial cost of $133,000. The...
Cash flows are end-of-period Suppose that you purchased a bond with a 4.9 percent coupon rate...
Cash flows are end-of-period
Suppose that you purchased a bond with a 4.9 percent coupon rate
for $930 today. The bond matures in ten years and makes semiannual
coupon payments.
a. What rate of return, expressed as an APR, do you expect to
earn on your investment if you plan to hold it until maturity?
b. Two years from now, the yield-to-maturity on your bond has
declined by 1 percentage point, and you decide to sell. How much
will you...
Below are the expected cash flows and interest rates for the next nine years. Cash flows...
Below are the expected cash flows and interest rates for the
next nine years. Cash flows will occur at the end of the nominated
years.
Cash Flows
Interest Rates
Year 0
Years 1 - 2
8%
Year 1
Year 2
+$ 6,500
Year 3
+$ 1,500
Years 3 – 8
6%
Year 4
Year 5
Year 6
-$ 2,500
Year 7
Year 8
Year 9
+$ 10,000
Years 9 - 10
7%
Year 10
i.
Using the Table function within...
What is the payback period for the following set of cash flows? Year Cash Flow...
What is the payback period for the following set of cash
flows?
Year
Cash Flow
0
−$ 4,200
1
2,500
2
2,600
3
2,600
4
1,900
Consider the following cash flows for projects A and B. Year &
Consider the following cash flows for projects A and B.
Year Project
A Project
B
0 -$1000 -$1000
1 375 900
2 375 700
3 375 500
4 375 -200
5 -100 200
The cost of capital for both projects is 10%. What is the cross
over rate for projects A and B (the rate at which NPV profiles of
the projcets intersect each other)?
1.
There is no cross over rate as the NPV profiles of projects A
and B do not cross each other for any rate between 0% and 100%.
2....
(1). What is the payback period of an investment with the following cash flows? Year ...
(1). What is the payback period of an
investment with the following cash flows?
Year Cash Flow
0
-60,000
1
30,000
2
20,000
3
15,000
4
10,000
5
5,000
(2). A project has the following cash flows:
Year Cash
Flow
0
-$4,000
1
2,000
2
2,000
3
2,000
4
2,000
Its cost of capital is 10 percent. What is the project’s
discounted payback period?
What is the payback period for the following set of cash flows? Year Cash Flow 0...
What is the payback period for the following set of cash
flows?
Year Cash Flow
0 -5,360
1 1,591
2 1,572
3 1,531
4 1,800
What is the payback period for the following set of cash flows? Year Cash Flow 0...
What is the payback period for the following set of cash
flows?
Year Cash Flow 0 −$ 3,900 1 1,000 2 2,000 3 1,100 4 2,900
Multiple Choice 3.12 years 2.82 years 2.77 years 2.84 years 2.96
years
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- The Financial Accounting Standards Board (FASB) is responsible for the Generally Accepted Accounting Principles (GAAP). Select...
- The weather report says the temperature is 78.0°F, the barometer is at 29.90 inches Hg, the...
- An acute viral disease infects a population of chipmunks, and only those homozygous for allele b...
- 5.-Competitiveness of the Home Market. A strongly competitive home market can sharpen a firm’s competitive advantage...
- A 10.0 mg sample of a nonvolatile organic compound is dissolved in 1.0 g of camphor,...
- Question text Susan hires a small construction organization to repair and renovate her hourse. The company...
- Compare and contrast modernization theory and dependency theory. Which do you think is more useful for...
ADVERTISEMENT