1. The following cash-flow streams need to be analyzed: END OF YEAR CASH-FLOW STREAM 2 3 4 5 $100 $200 $200 $300 $300 X 600 Y 1,200 200 500 300 a. Calculate the future (terminal) value of each stream at the end of year 5 with a com- pound annual interest rate of 10 percent. b. Compute the present value of each stream if the discount rate is 14 percent.
1. The following cash-flow streams need to be analyzed: END OF YEAR CASH-FLOW STREAM 2 3 4 5 $100 $200 $200 $300 $300 X 600 Y 1,200 200 500 300 a. Calculate the future (terminal) value of each stream at the end of year 5 with a com- pound annual interest rate of 10 percent. b. Compute the present value of each stream if the discount rate is 14 percent.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:1. The following cash-flow streams need to be analyzed:
END OF YEAR
CASH-FLOW
STREAM
2
3
4
W
$100
$200
$200
$300
$300
600
Y
1,200
200
500
300
a. Calculate the future (terminal) value of each stream at the end of year 5 with a com-
pound annual interest rate of 10 percent.
b. Compute the present value of each stream if the discount rate is 14 percent.
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