Answered: $5000 $2000 L 1 2 4 6 7 8 9 10 $7000…

Business

Accounting

$5000 $2000 L 1 2 4 6 7 8 9 10 $7000 $7000 Problem 20.18

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

What are the equivalent present worth, annual worth, and future worth of the cash flow given in the accompanying figure? Assume i = 8% .

$5000
$2000
L
1
2
4
6
7
8
9
10
$7000
$7000
Problem 20.18

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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