A cash-flow series is increasing geometrically at the rate of 8% per year. The initial payment at EOY 1 is $5,000, with increasing annual payments ending at EOY 20. The interest rate is 15% compounded annually for the first seven years and 5% compounded annually for the remaining 13 years. Find the present amount that is equivalent to this cash flow.

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A:

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A: Present Value of future cash flow means the cash flows discounted at a given rate of return. FV*…

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A: To calculate the present value of payment that will receive after 1 year we will use the below…

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A: Equivalent Annual Cash Flow = PV x r / [1 - {1 / (1 + r)^n}]

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A: Present value refers to the current valuation for a future sum. Investors determine the present…

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A: Perpetuity:It shows the present value of the cash flows which are payable at equal intervals…

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A: Here, Monthly Payment is $5 Monthly Interest Rate is 0.5% Monthly Growth Rate is 0.1%

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A: Present value is the sum of the current value of money of future cash flows. It is also known as a…

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A: The future value of this stream of receipts can be calculated using the future value of an annuity…

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A: The concept of time value of money will be used here. As per the concept of time value of money the…

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A: first calculate the amount after first half present value = FV/(1+rate)n = 12,000/(1 + 1.1%/6)5*6 =…

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A: Let the money to be invested now = X Semiannual payment (A) = $1500 Number of payments (n) = 16 r =…

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A: There are various types of Bank Accounts, one of the basic and most commonly used is Saving's…

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A: A concept that implies the future worth of the money is lower than its current value due to several…

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A: Using excel PV function, This is question of annuity due since cashflow starting today

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A: Interest is the cost of borrowing the money.

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A: Working note:

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Q: 9th deposit is m

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A: The size of each payment is $3218.97

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A: To find the compounded interest at the end of 10 years we will use future value from excel and then…

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A: An annuity is a sum of series of payments after every year or after every quarter. An annuity can be…

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A: Future value (FV) refers to the value of an investment or an asset at a specified point in the…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.