What is the present value and future value of the following cash flow stream at a...

What is the present value and future value of the following cash flow stream at a rate of 8.00%? Years: 0 1 2 3 4 CFs: $0 $75 $225 $0 $500

Solutions

Expert Solution

Present value=Cash flows*Present value of discounting factor(rate%,time period)

=75/1.08+225/1.08^2+500/1.08^4

=$629.86(Approx)

We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.

Future value=629.86*(1.08)^4

=$856.92(Approx)

jeff jeffy answered 2 years ago

Next > < Previous

Related Solutions

What is the present value of the following cash flow stream at a rate of 3.0%...

What is the present value of the following cash flow stream at a rate of 3.0% per year? Year 0: $0, Year 1: $75, Year 2: $225, Year 3: $0, Year 4: $300

What is the present value of the following cash flow stream at a rate of 7.0%...

What is the present value of the following cash flow stream at a rate of 7.0% per year? cash flow stream : 0=0$ 1=$75 2=$225 3=$0 4=$300 years and CF'S

What is the Net Present Value of the following cash flow stream? Year Cash Flow 0...

What is the Net Present Value of the following cash flow stream? Year Cash Flow 0 -$489 1 $363 2 $192 3 $161 4 $256 Assume an interest rate of 13% Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. If your answer is negative, enter your answer as a negative number rounded off to two decimal points.

What is the present value of the following cash-flow stream if the interest rate is 4%?...

What is the present value of the following cash-flow stream if the interest rate is 4%? You receive 650 at the end of first year, 900 at the end of second year, and 260 at the end of third year. (4% is annual interest rate and given annual compounding) [Please round your answer to the nearest whole number]

Problem 4-7 Present and Future Value of an Uneven Cash Flow Stream An investment will pay...

Problem 4-7 Present and Future Value of an Uneven Cash Flow Stream An investment will pay $200 at the end of each of the next 3 years, $400 at the end of Year 4, $600 at the end of Year 5, and $800 at the end of Year 6. If other investments of equal risk earn 8% annually, what is its present value? Round your answer to the nearest cent.What is its future value? Round your answer to the nearest...

What is the present value of the following uneven cash flow stream? The appropriate interest rate...

What is the present value of the following uneven cash flow stream? The appropriate interest rate is 5.6%, compounded annually. Note that the final cash flow represents a project where there may be reclamation or other “end of project” costs which are greater than any final income and/or salvage value. What annual interest rate will cause $2,750 to grow to $4,200 in 5 years, assuming annual compounding? Show your answer to 2 decimals (x.xx%) Will the future value be larger...

PRESENT AND FUTURE VALUES OF A CASH FLOW STREAM An investment will pay $50 at the...

PRESENT AND FUTURE VALUES OF A CASH FLOW STREAM An investment will pay $50 at the end of each of the next 3 years, $200 at the end of Year 4, $300 at the end of Year 5, and $550 at the end of Year 6. If other investments of equal risk earn 11% annually, what is its present value? Round your answer to the nearest cent. $ If other investments of equal risk earn 11% annually, what is its...

PRESENT AND FUTURE VALUES OF A CASH FLOW STREAM An investment will pay $50 at the...

PRESENT AND FUTURE VALUES OF A CASH FLOW STREAM An investment will pay $50 at the end of each of the next 3 years, $250 at the end of Year 4, $350 at the end of Year 5, and $550 at the end of Year 6. If other investments of equal risk earn 4% annually, what is its present value? Round your answer to the nearest cent. $ If other investments of equal risk earn 4% annually, what is its...

Find the future value of the following cash flow stream at a rate of 5%: Year...

Find the future value of the following cash flow stream at a rate of 5%: Year 0: $0, Year 1: $400, Year 2 $300, Year 3 $250.

8. Calculate the Future Value of the following cash flow stream. Assume that 12.50% is the...

8. Calculate the Future Value of the following cash flow stream. Assume that 12.50% is the appropriate rate. Year Cash Flow 1-5 $2,000 6-12 4,000 13 10,000 14-20 13,000 21-25 16,000

Subjects