Question

In: Finance

Calculate the present value (PV ) of a cash inflow of $500 in one year, and a cash inflow of $1,000 in 5 years, assuming a discount rate of 15%.

Calculate the present value (PV ) of a cash inflow of $500 in one year, and a cash inflow of $1,000 in 5 years, assuming a discount rate of 15%.

Solutions

Expert Solution

present value (PV ) of a cash inflow                     931.96
Statement showing Cash flows
Particulars Time PVF 15% Amount PV
Cash Flows                           1.00                   0.8696                   500.00                   434.78
Cash Flows                           2.00                   0.7561                             -  
Cash Flows                           3.00                   0.6575                             -  
Cash Flows                           4.00                   0.5718                             -  
Cash Flows                           5.00                   0.4972                1,000.00                   497.18
Present value of Cash flows                   931.96

Related Solutions

What is the PV of the following cash flows, assuming a 5% discount rate?
What is the PV of the following cash flows, assuming a 5% discount rate?Initial investment – year 0:  $(1,000,000)Year 1 cash flows: $100,000Year 2 cash flows: $100,000Year 3 cash flows: $100,000Year 4 -sale: $1,200,000
Calculate the present value (PV ) of an annuity stream of 5 annual cash flows of $1,200, with the first cash flow received in one year
  Calculate the present value (PV ) of an annuity stream of 5 annual cash flows of $1,200, with the first cash flow received in one year, assuming a discount rate of 10%.
Calculate the present value of the following cash flows given a discount rate of 12%: Year...
Calculate the present value of the following cash flows given a discount rate of 12%: Year 1 Year 2 Year 3 Year 4 Cash Flows $1,500 $4,500 $8,500 $12,000
Find the present value of $100 due in one year if the discount rate is 5%,...
Find the present value of $100 due in one year if the discount rate is 5%, 8%, 10%, 15%, 20%, and 25%. Please show your work so that I understand how your arrived at your answers Subject is Managerial Economics
Find the present value of the following cash flow stream assuming a discount rate of 8%:...
Find the present value of the following cash flow stream assuming a discount rate of 8%: A payment of $10,000 received at the end of each MONTH over the coming 4 years, followed by a payment of $5000 received at the end of each MONTH over the 6 years after that. a.) $556,975.15 b.) $409,619.13 c.) $285,172.61 d.) $207,297.84 e.) $616,916.97
Calculate the present value of a growing annuity at a discount rate of 9% per year....
Calculate the present value of a growing annuity at a discount rate of 9% per year. The growth rate (constant) of the annuity is 4% per year. the life of the annuity is 10 years. the first annuity payment is $2000 occurring at the end of year one. Calculate using Excel please.
a. What is the present value​ (PV) of $70,000 received six years from​ now, assuming the...
a. What is the present value​ (PV) of $70,000 received six years from​ now, assuming the interest rate is 4​% per​ year? a. $47,024 b. $45,500 c. $96,814 d. $55,322 b. Convex Industries has inventories of $212 ​million, current assets of $1.20 ​billion, and current liabilities of $528 million. What is its quick​ ratio? a. 1.87 b. 2.25 c.0.94 d.0.75
a. What is the present value​ (PV) of $60,000 received thirty years from​ now, assuming the...
a. What is the present value​ (PV) of $60,000 received thirty years from​ now, assuming the interest rate is 6​% per​ year? a. 10,447 b.8880 c. 18,282 d. 39,000 b. If $546 invested today yields $600 in one​ year's time, what is the discount​ factor? a. 1.91 b. 0.09 c. 1.82 d. 0.91 c. If the one​-year discount factor is equal to 0.95238​, the interest must be equal​ to: a.5.0% b. 4.5% c.2.5% d.4.0%
The discount rate that equates the present value of a project’s cash inflows with the present...
The discount rate that equates the present value of a project’s cash inflows with the present value of the project’s outflows is:
a. Write down the formula used to calculate the Present Value (PV) of a future Cash...
a. Write down the formula used to calculate the Present Value (PV) of a future Cash Flow (CF)   for ‘n’ years. Using this formula, explain why the price of a coupon bond and the yield to maturity are negatively related.   b. If there is an increase in interest rates, which would you rather be holding, long-term bonds or short-term bonds? Why? Which type of bond has the greater interest-rate risk?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT