For an investment ending at time T we denote the net cash flow at time t by c and the net rate of cashflow per unit time by p(t). The present time is t = 0 and time is measured in years. An infrastructure fund considers the construction of a new bridge. It estimates that the project will require an initial outlay of £22.475m = £22,475,000 and a further outlay of £10m after one year (m = million). There will be an estimated inflow of toll charges of £1m per annum payable continuously for 47 years, beginning at time t = 3. Task: Measuring time in years, select all the net cash flows associated with this venture: O c_0 = -£22.475m O c_0 = £22.475m O c_1 = -£10m O c_1 = £10m O p(t) = -£1m for 0 sts 47 O p(t) = £1m for 0 sts 47 p(t) = -£1m for 3 sts 50 p(t) = £1m for 3 sts 50 c_50 = -£10m O c_50 = £10m
For an investment ending at time T we denote the net cash flow at time t by c and the net rate of cashflow per unit time by p(t). The present time is t = 0 and time is measured in years. An infrastructure fund considers the construction of a new bridge. It estimates that the project will require an initial outlay of £22.475m = £22,475,000 and a further outlay of £10m after one year (m = million). There will be an estimated inflow of toll charges of £1m per annum payable continuously for 47 years, beginning at time t = 3. Task: Measuring time in years, select all the net cash flows associated with this venture: O c_0 = -£22.475m O c_0 = £22.475m O c_1 = -£10m O c_1 = £10m O p(t) = -£1m for 0 sts 47 O p(t) = £1m for 0 sts 47 p(t) = -£1m for 3 sts 50 p(t) = £1m for 3 sts 50 c_50 = -£10m O c_50 = £10m
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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Transcribed Image Text:For an investment ending at time T we denote the net cash flow at time t by c; and the net rate of cashflow per
unit time by p(t). The present time is t = 0 and time is measured in years.
An infrastructure fund considers the construction of a new bridge. It estimates that the project will require an
initial outlay of £22.475m = £22,475,000 and a further outlay of £10m after one year (m = million). There will be
an estimated inflow of toll charges of £1m per annum payable continuously for 47 years, beginning at time t = 3.
Task: Measuring time in years, select all the net cash flows associated with this venture:
O c_0 = -£22.475m
O c_0 = £22.475m
O c_1 = -£10m
O c_1 = £10m
O p(t) = -£1m for 0 sts 47
O p(t) = £1m for 0 sts 47
O p(t) = -£1m for 3 <t < 50
O p(t) = £1m for 3 <t< 50
O c_50 = -£10m
O c_50 = £10m
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