Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Consider the following cash flow:
Time Amount
3
3
4
2
6+
The cash flow consists of 5 payments. The present value of 1 dollar in one year is denoted v (as
usual).
[Note that for the purposes of this question (and because of the limitations of Canvas) the "angle n"
for an annuity-certain we are used to (actuarial notation) will be denoted by a (the angle is not
perfect, but take it as perfect).
Which of the following expressions correspond to the the present value of the cash flow displayed
above?
(3a + ä0 a)
2.
1.
1.
2.
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