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A company expects to receive the following cash flows in arrears from a commercial project: Year Total Annual Payment 1 to 10 $1,000 11 to 20 $2,000 21 to 30 $3,000 Suppose the annual interest rates are given as ¿(4) = 4% i=3% for year 1 to 10 for year 11 to 20 dx6) = 5% for year 21 to 30. Frequency of Payments monthly quarterly weekly Treating weekly payments as continuous payments (for convenience), calculate the total present value of all the cash flows from the project to the company.

A company expects to receive the following cash flows in arrears from a commercial project: Year Total Annual Payment 1 to 10 $1,000 11 to 20 $2,000 21 to 30 $3,000 Suppose the annual interest rates are given as ¿(4) = 4% i=3% for year 1 to 10 for year 11 to 20 dx6) = 5% for year 21 to 30. Frequency of Payments monthly quarterly weekly Treating weekly payments as continuous payments (for convenience), calculate the total present value of all the cash flows from the project to the company.

Essentials Of Investments
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
Problem 1PS
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A company expects to receive the following cash flows in arrears from a commercial project: Year Total Annual Payment Frequency of Payments 1 to 10 $1,000 monthly quarterly 11 to 20 $2,000 21 to 30 $3,000 weekly Suppose the annual interest rates are given as (4) = 4% for year 1 to 10 i = 3% for year 11 to 20 d(6) = 5% for year 21 to 30. Treating weekly payments as continuous payments (for convenience), calculate the total present value of all the cash flows from the project to the company.
Transcribed Image Text:A company expects to receive the following cash flows in arrears from a commercial project: Year Total Annual Payment Frequency of Payments 1 to 10 $1,000 monthly quarterly 11 to 20 $2,000 21 to 30 $3,000 weekly Suppose the annual interest rates are given as (4) = 4% for year 1 to 10 i = 3% for year 11 to 20 d(6) = 5% for year 21 to 30. Treating weekly payments as continuous payments (for convenience), calculate the total present value of all the cash flows from the project to the company.
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