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EOY Cash Flow EOY Cash Flow - $45,000 5 $8,000 1 $12,000 $7,000 2 $11,000 7 $6,000 3 $10,000 8 $5,000 4 $9,000

EOY Cash Flow EOY Cash Flow - $45,000 5 $8,000 1 $12,000 $7,000 2 $11,000 7 $6,000 3 $10,000 8 $5,000 4 $9,000

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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Consider the following cash flow profile: Suppose the positive-valued cash flows are now replaced by a geometric series. If the cash flow at end of year 1 is $10,000, what geometric rate is required for the cash flow profiles to be equivalent? Interest is at a compounded annual rate of 6%.

EOY Cash Flow EOY Cash Flow - $45,000 5 $8,000 1 $12,000 $7,000 2 $11,000 7 $6,000 3 $10,000 8 $5,000 4 $9,000
Transcribed Image Text:EOY Cash Flow EOY Cash Flow - $45,000 5 $8,000 1 $12,000 $7,000 2 $11,000 7 $6,000 3 $10,000 8 $5,000 4 $9,000
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