Answered: Dosky expects to receive GHȼ300,…

Dosky expects to receive GHȼ300, GHȼ500, GHȼ1000 and GHȼ1500 in year1,2,3 and 4 respectively. What is the value of these cash flows at the end of the fourth year given 10 percent interest rate?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 29P

See similar textbooks

Related questions

Q: Consider the following cash flow profile: Suppose the positive-valued cash flows are now replaced by…

A: Cash flows are the amount of cash and cash equivalents inflow and outflow of the company in a…

Q: Suppose that starting a year from now you will receive $720 a year at the end of every year. If the…

A: In this question we need to calculate the Present value of perpetuity i.e. stream of cash flows…

Q: Suppose you expect to receive the following future cash flows at the end of the years indicated.…

A: Future value- Year FV 2 $2300 4 $5200 5 $2600 9 $8000…

Q: Consider each of the following deposit cash flow series. What will the final balance be (future…

A: Compound interest means that the interest associated with the cash flows/ deposits increases…

Q: Assume that time is measured in years and that interest rates are constant. A cashflow of amount…

A: Present value refers to the current value of a future cash flow or series of cash flows, discounted…

Q: Consider the following three cash flow series: Determine the values of X and Y so that all three…

A: Cash flow for the series is computed using excel: Result is:

Q: You have cash flows of $100 at the end of year 1, $200 at the end of years 2 and 3, and $300 at the…

A: The problem requires the determination of the present value of the cash flows using discounting and…

Q: What is the present value of a perpetuity stream of cash flows that pays P1,000 at the end of year…

A: present value of a perpetuity stream of cash flows = cash flows at end of year 1/(Discount rate -…

Q: annual payment from a cash flow is expected to grow 4% per year from year 1 to year 10, after which…

A: The present value of cash flow would be the equivalent value today that is equivalent to cash flow…

Q: What will be the future value of the following cash flows by the end of the fifth year, if the…

A: Future value is the value of the current assets or some amount that is invested today and amount…

Q: Are the following shown cash-flow diagrams economically equivalent if the interest rate is 10% per…

A: Given Information: Two cash flows diagrams with following values: Year Cash Flows A Cash Flows B…

Q: You are given $200 each year starting next year and finishing in 15 years (t = 15). If the discount…

A: We need to use present value of annuity due formula to calculate present value of cash flows stream.…

Q: What is the present value of a perpetual stream of cash flows that pays $5, 000 at the end of year…

A: Cashflows = $5,000 Growth rate = 4% Discount rate = 11%

Q: You will be receiving cash flows of: $2,000 today, $2,000 at the end of year 1, $3,000 at the end…

A: Net Present Value(NPV) is excess of present value(PV) of all future cash inflows over initial outlay…

Q: What is the present value of the following cash-flow stream if the interest rate is 4%? Year 1:…

A: Present value of cashflow stream is the sum of Present value of future cashflows

Q: Using the future values tables, solve the following: Us ing the future values tables, solve the…

A: Here, Periodic investment = $20,000Interest rate = 10% Time period = 10 yearsTo find:Future value…

Q: Suppose you receive$130 at the end of each year for the next three years. a. If the interest…

A: The PV of an asset is the value of all its cash flows today discounted at an assumed interest rate.…

Q: You are expecting to receive a payment of $5969 in 2 years and $9869 in 6 years. If the interest…

A: One of the useful concept used in finance is time value of money. It says that a dollar amount…

Q: What is the present value of the following cash-flow stream if the interest rate is 12%? You receive…

A: In the given question we require to calculate the present value of the stream of cashflows.

Q: ou will receive $100 one year from today and another $100 two years from today. The interest rate…

A: Present Value is a current price of the future value at specified rate of interest which amount will…

Q: Using the future values tables, solve the following: What is the future value on June 30, Year 11,…

A: Future value means the future worth of the money received today.The future value is computed to know…

Q: QUESTION . Al-Salam is expecting the following cash flows starting at the end of the year BD…

A: The future value of the annuity is the future worth of a cash flow series at a certain rate of…

Q: A firm expects to make payments of 1.1, 1.5, 1.2, 1.4 and 1.9 million for a particular supply over…

A: Solution:- Present value means the value in today’s terms after discounting the future cash flows to…

Q: A. If money is worth 4% compounded monthly, what payment at the end of each quarter will replace…

A: Details of A: Interest Rate is 4% Compounding Period is Monthly i.e 12 Monthly Payment is P500.00…

Q: What constant annual payment is this equivalent to if the annual rate is 10%?

A: Equivalent Annual Payment: It computes the constant annual cash flow produced by a project over its…

Q: onsider $5MM to be paid in five years. If the risk premium investors assign to this cash flow…

A: present value of cashflow is the value of future cashflow at present date. formula: present…

Q: What is the future value factor for a cash flow to be received in seven years, where the interest…

A: Interest rate (r) = 15% Period (n) = 7 Years

Q: Consider the following cash flow diagram. What value of C makes the inflow series equivalent to the…

A: The present value of the cash flow is the current worth of a cash flow at a certain rate of interest…

Q: What amount will be the present value of the following cash flows, given that the discount rate is…

A: Present value: It can be defined as today’s worth of an investment that will be received in the…

Q: What is the present value of end-of-year cash flows of 1000 per year, with the first cash flow…

A: Present value is the sum of discounted future cashflow

Q: The future worth in year 8 for the cash flows shown is $20,000. At an interest rate of 10% per year,…

A: The formula to compute future value as follows:

Q: Suppose you expect to receive the following future cash flows at the end of the years indicated: GHC…

A: The present value of the cash flow is the current worth of a cash flow at a certain rate of interest…

Q: Determine the present worth of the following cash flows if the interest rate is 6% per year:

A: Present worth is used to apply in the series of the cash flows, which used to occur at the various…

Q: Consider the cash flow series given in the accompanying table. What value of C makes the deposit…

A: Future Value of deposits at Year 5 = Present Value of withdrawals at Year 5 Interest Rate = 6%…

Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

Question

Dosky expects to receive GHȼ300, GHȼ500, GHȼ1000 and GHȼ1500 in year1,2,3 and 4 respectively. What is the value of these cash flows at the end of the fourth year given 10 percent interest rate?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Information;

VIEW

Calculation of value of cash flows at the end of fourth year (Future value);

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Assume that time is measured in years and that interest rates are constant. A cashflow of amount £1000 is paid each year, with the first payment made at time 1 and the last payment made at time 20. Using a constant effective interest rate of 3% per annum, calculate the present value at time 0 of the cashflows.
What is the present value of a perpetuity stream of cash flows that pays P1,000 at the end of year one, and the annual cash flows grow at a rate of 4% per year indefinitely, if the appropriate discount rate is 8%?
The annual payment from a cash flow is expected to grow 4% per year from year 1 to year 10, after which it will remain constant and equal to k10. What is the net present value of this infinite cash flow if k1 = 104 and the discount rate is 8%.
Note: Please sketch the cash-flow diagram.
Help
What will be the future value of the following cash flows by the end of the fifth year, if the interest rate is 6%, compounded annually?
What is the future value factor for a cash flow to be received in seven years, where the interest rate is 15%
Using the future values tables, solve the following: Us ing the future values tables, solve the following: What is the future value on December 31, Year 10, of 10 cash flows of $20,000 with the first cash payment made on December 31, Year 1, and interest at 10% being compounded annually?
You will receive cash flows of $23.42 next year from a perpetuity. The perpetuity is indexed to inflation, π=1.1%, such that payments grow at 1.2% faster than inflation. If the interest rate is 9.1% per year, what is the PV of the perpetuity?
Suppose you receive$130 at the end of each year for the next three years. a. If the interest rate is10%, what is the present value of these cash flows? b. What is the future value in three years of the present value you computed in(a)? c. Suppose you deposit the cash flows in a bank account that pays 10%interest per year. What is the balance in the account at the end of each of the next three years (after your deposit is made)? How does the final bank balance compare with your answer in (b)?
Using the figure above, calculate the future worth (at the end of year 10) of a cash flow series of 10 equal annual deposits of R2500 if all deposits are made at the beginning of each year starting today (year 0) at 9% annual interest? [10]
You expect to deposit the following cash flows at the end of years one (1) through to five (5), $1, 000, $4, 000, $9, 000, $5, 000 and $2, 000 respectively. What is the future value at the end of year six (6) if you can earn 10% compounded annually?