4Consider a cash flow that lasts for ten years.the initial value A occurs at the third year, decreasing by 6% thereafter, what isthe value of A if the present equivalent for this series is $34,717, and the interestrate is 8% per yearout of

The time value of money becomes an important factor for capital budgeting decisions. It is an idea…

Answered: Consider a cash flow that lasts for ten…

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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Similar questions

An investment makes annual payments. The first payment of $245 is due in one year at i = 1. The payments grow at a rate of 14.0% annually until t =14. Payments are then stable until t =32. Afterwards, payments grow at a rate of 2.0% annually (the payment at i =33 is 2.0% bigger that the payment at 1 =32) and are paid into perpetuity. a) What is the size of the cash flow at / =15? 2$ |(Give answer to 2 decimal places.) b) What is the size of the cash flow at t =33? |(Give answer to 2 decimal places.) c) What is the present value of the investment if the discount rate is 16.0%? | (Give answer to 2 decimal places.)
"Assume that the interest rate is 8.5% per year and you expect to receive the following stream of annual cash flows (The year 0 cash flow occurs today and the year 4 cash flow occurs exactly 4 years from today): (Year 0: $15,100); (Year 1: $21,100); (Year 2: $12,700): (Year 3: $19,250): (Year 4: $9,550); What is the current Present Value (PVO) of the stream of cash flows?" a)"$68,013- b)"$67,297" c)"$77,700 d)"$62,025" e)$64,399 f)$68,643"
suppose that $5000 is invested each quarter, for the next 20 years. what is the future worth if the investment earns an annual rate of 9% compounded quarterly?
With a present value of $110,000, what is the size of the withdrawals that can be made at the end of each quarter for the next 10 years if money is worth 7.1%, compounded quarterly? (Round your answer to the nearest cent.)
Suppose $8,000 is invested in an account with an annual interest rate of 4.7% per year, compounded monthly. How much money will be in the account after 35 years? $ Round your answer to the nearest penny. How long will take for the investment to double? years. Round to two decimal place.
If $2, 000 is invested for two years after which it grows to a value of $2112.40. What is the effective rate of interest at which it grows?
Given an interest rate of 12% per year, what is the present value of a perpetual stream of $1,000 payments with the first payment beginning in 4 years?
With a present value of $125,000, what is the size of the withdrawals that can be made at the end of each quarter for the next 10 years if money is worth 7.1%, compounded quarterly? (Round your answer to the nearest cent.)$_____
1.You expect to receive AED 400,000 a year for the next 10 years and this amount will grow at a rate of 6% . What is the present value of the expected cash flows for the next 10 years if the interest rate is 8% per year?
With a present value of $130,000, what is the size of the withdrawals that can be made at the end of each quarter for the next 10 years if money is worth 6.2%, compounded quarterly? (Round your answer to the nearest cent.) $
Find the present value of a cash flow stream which pays $5000 at the end of every year for 15 years at an interest rate of 9%?
A set of cash flows begins at $25,000 the first year, decreasing 10% each year until n = 10 years. If the interest rate is 4%, what is the present value?

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Consider a cash flow that lasts for ten years. the initial value A occurs at the third year, decreasing by 6% thereafter, what is the value of A if the present equivalent for this series is $34,717, and the interest rate is 8% per year