### Future Worth Calculation of Cash Flow SeriesExxon-Mobil's receipts and disbursements are shown below. Calculate the future worth in year 7 at an interest rate of 8% per year.| Year | Cash Flow ($) ||------|---------------|| 0 | -6,000 || 1 | 5,000 || 2 | 4,000 || 3 | 5,000 || 4 | 5,000 || 5 | -1,000 || 6 | 7,000 || 7 | 8,000 |Options:- $31,023.34- $18,101.82- $19,998.37- $31,312.27**Explanation:**To find the future worth in year 7, one must compound each cash flow to year 7 using the given interest rate of 8% per year. The future value $ FV $ is calculated using the formula:\[ FV = PV \times (1 + r)^{n} \]Where:- $ PV $ is the present value (cash flow)- $ r $ is the interest rate per period- $ n $ is the number of periodsEach cash flow will be compounded to year 7, and the sum of all these future values will give the future worth in year 7. Given cash flows are at various years:- For year 0 (initial investment), $ n = 7 $- For year 1 cash flow, $ n = 6 $- For year 2 cash flow, $ n = 5 $- For year 3 cash flow, $ n = 4 $- For year 4 cash flow, $ n = 3 $- For year 5 cash flow, $ n = 2 $- For year 6 cash flow, $ n = 1 $- For year 7 cash flow, $ n = 0 $Using this method, each future value component will be calculated, and summed to get the final future worth.

Future worth (FW) is the value of cash flows at a future date with a growth rate. Future worth of…

Exxon-Mobil's receipts and disbursements are shown below. Calculate the future worth in year 7 at an interest rate of 8% per year. Year Cash Flow, S -6,000 5,000 4,000 5,000 4 5,000 5 -1,000 7,000 7 8,000 $31,023.34 O S18,101.82 O S19,998.37 O $31,312.27

Exxon-Mobil's receipts and disbursements are shown below. Calculate the future worth in year 7 at an interest rate of 8% per year. Year Cash Flow, S -6,000 5,000 4,000 5,000 4 5,000 5 -1,000 7,000 7 8,000 $31,023.34 O S18,101.82 O S19,998.37 O $31,312.27

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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If the rate of earnings is 12% and the cash to be received in two years is $20,000, determine the present value amount, using the following partial table of present value of $1 at compound interest. Year 6% 10% 12% 1 0.943 0.909 0.893 2 0.890 0.826 0.797 3 0.840 0.751 0.712 4 0.792 0.683 0.636
The Hudson Corporation makes an Investment of $28,050 that provides the following cash flow. Year 1 2 3 Cash Flow $ 15,808 15-808 3,000 Use Appendix F and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. a. What is the net present value at a discount rate of 4 percent? Note: Do not round Intermediate calculations and round your answer to 2 decimal places. Nel present value b. What is the internal rate of return? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. internal rate of return
What is the future value at the end of year three of the following set of cash flows at an interest rate of 10% p.a. compounded annually? End of Year 1 $5,100 End of Year 2 $2,300 End of Year 3 $1,150 Select one: a. $8,550 b. $9,966 c. $9,851 d. $9,581
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For the cash flow revenues shown below, find the value of G that makes the equivalent annual worth in years 1 through 7 equal to $500. The interest rate is 6.00% per year. (Round the final answer to three decimal places.) Cash flow, $ Year 0 1 2 3 The value of G is $ 225.0 225.0+ G 225.0+2G Year 4 5 16 Cash flow, $ 225.0+36 225.0+4G 225.0+5G 225.0+66
Term in years: Rate: 2 OA $74.862 OB $02.385 OC. $57,339 OD $40.000 10 35% 30 43755 3.125% The table above shows the interest rates available from investing in msk free US Treasury securbes with different investment ferms. If an investment offers a risk-free cash flow of $85,000 in ten years' time, what is the present value (PV) of that cash flow?
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Calculate the following from the information given Fego Ltd:1. Payback Period (expressed in years, months and days).2. Accounting Rate of Return on initial investment (expressed to two decimal places).3. Internal Rate of Return (expressed to two decimal places) if the net cash inflows are R400 000 per year for five years. Your answer must include two net present value calculations (using consecutive rates/percentages) and interpolation.
A financial instrument provides three future cash flows: 1. $1,406.01 at the end of 2 years 2. $2,596.43 at the end of 8 years 3. $1,172.62 at the end of 13 years Calculate the duration (D) of the financial instrument at a yield of 7% pa compounded yearly. Give your answer in years to 2 decimal places. D years
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