**Determine the Present Equivalent Value of Cash Flows**When the annual interest rate, $ i_k $, varies as indicated, you need to determine the present equivalent value of the cash-flow diagram presented below. The diagram specifies cash inflows at different time intervals with varying interest rates.### Cash-Flow Diagram Details:- **Year 0**: Present value, $ P = ? $- **Year 1**: $2,500 at $ i_1 = 6\% $- **Year 2**: $ i_2 = 15\% $- **Year 3**: $5,000 at $ i_3 = 12\% $- **Year 4**: $ i_4 = 6\% $- **Year 5**: $2,500 at $ i_5 = 6\% $- **Year 6**: $5,000 at $ i_6 = 15\% $### Instructions- Click the icon to view the interest and annuity table for discrete compounding when $ i = 6\% $ per year.- Click the icon to view the interest and annuity table for discrete compounding when $ i = 12\% $ per year.#### TaskCalculate the present equivalent value, rounding to the nearest cent.#### Result- The present equivalent value is \$____. (Round to the nearest cent)

Determine the present equivalent value of the cash-flow diagram shown below when the annual interest rate, i, varie as indicated. ܗܢܒܢܐ ܗ ܦܘܫܝܤܝܢ P=? $2,500 $5,000 The present equivalent value is iq = 6% 12=15%| 13 = 12% ig = 6% ig = 6% 16 = 15% 2 3 Years $2,500 (Round to the nearest cent) $5,000 5 Click the icon to view the interest and annuity table for discrete compounding when i= 6% per year. | Click the icon to view the interest and annuity table for discrete compounding when i= 12% per year. ܘ

Determine the present equivalent value of the cash-flow diagram shown below when the annual interest rate, i, varie as indicated. ܗܢܒܢܐ ܗ ܦܘܫܝܤܝܢ P=? $2,500 $5,000 The present equivalent value is iq = 6% 12=15%| 13 = 12% ig = 6% ig = 6% 16 = 15% 2 3 Years $2,500 (Round to the nearest cent) $5,000 5 Click the icon to view the interest and annuity table for discrete compounding when i= 6% per year. | Click the icon to view the interest and annuity table for discrete compounding when i= 12% per year. ܘ

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

**Determine the Present Equivalent Value of Cash Flows**

When the annual interest rate, $ i_k $, varies as indicated, you need to determine the present equivalent value of the cash-flow diagram presented below. The diagram specifies cash inflows at different time intervals with varying interest rates.

### Cash-Flow Diagram Details:
- **Year 0**: Present value, $ P = ? $
- **Year 1**: $2,500 at $ i_1 = 6\% $
- **Year 2**: $ i_2 = 15\% $
- **Year 3**: $5,000 at $ i_3 = 12\% $
- **Year 4**: $ i_4 = 6\% $
- **Year 5**: $2,500 at $ i_5 = 6\% $
- **Year 6**: $5,000 at $ i_6 = 15\% $

### Instructions
- Click the icon to view the interest and annuity table for discrete compounding when $ i = 6\% $ per year.
- Click the icon to view the interest and annuity table for discrete compounding when $ i = 12\% $ per year.

#### Task
Calculate the present equivalent value, rounding to the nearest cent.

#### Result
- The present equivalent value is \$____. (Round to the nearest cent)

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Determine the present equivalent value of the cash-flow diagram shown below when the annual interest rate, i, varies as indicated. P=? ܂ $1,000 i₁ = 8% 1 $2,000 The present equivalent value is $ 2 = 15% 2 i3 = 12% $1,000 ig = 8% 3 Years ܗܘܢ ܗܝ (Round to the nearest cent.) 4 $2,000 15 = 8% 16 = 12% 5 Click the icon to view the interest and annuity table for discrete compounding when i = 8% per year. Click the icon to view the interest and annuity table for discrete compounding when i= 12% per year. 6
1.12 Choose the equation below that can be used to determine the value of "P" for a known interest rate, i. Hint think in gradient payment series. No need to show work on this one. Year Cash Flow, $ 0 P 1 0 2 -2,000 a) P = 10,000(P/F, i%, 5) - 2,000(P/G, i%, 5) b) P = 10,000- 1,000(P/G, i%, 5) (F/P, 1%, 5) c) P= 10,000(P/F, i%, 5) -2,000(P/G, i%, 5) d) P= -10,000(P/F, i%, 5) + 2,000(P/G, 1%, 4) 3 -4,000 4 -6,000 5 10,000
*Any help with this question would be appreciated, thanks!*