For the cash flows shown, you have been asked to calculate the present worth (in year 0) using i = 10% per year. Which of the following solutions is not correct? Year 0 1 2 3 4 5 6 Cash Flow, $ 200 200 200 200 300 300 300 (a) P = 200 + 200(P∕A,10%,3) + 300(P∕A,10%,3)(P∕F,10%,3) (b) P = 200(P∕A,10%,4) + 300(P∕A,10%,3) (P∕F,10%,3) (c) P = [200(F∕A,10%,7) + 100(F∕A,10%,3)] (P∕F,10%,6) (d) P = [200(P∕A,10%,7) + 100(P∕A,10%,3) (P∕F,10%,4)](F∕P,10%,1)
For the cash flows shown, you have been asked to calculate the present worth (in year 0) using i = 10% per year. Which of the following solutions is not correct? Year 0 1 2 3 4 5 6 Cash Flow, $ 200 200 200 200 300 300 300 (a) P = 200 + 200(P∕A,10%,3) + 300(P∕A,10%,3)(P∕F,10%,3) (b) P = 200(P∕A,10%,4) + 300(P∕A,10%,3) (P∕F,10%,3) (c) P = [200(F∕A,10%,7) + 100(F∕A,10%,3)] (P∕F,10%,6) (d) P = [200(P∕A,10%,7) + 100(P∕A,10%,3) (P∕F,10%,4)](F∕P,10%,1)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
For the cash flows shown, you have been asked to
calculate the present worth (in year 0) using i =
10% per year. Which of the following solutions is
not correct?
Year 0 1 2 3 4 5 6
Cash Flow, $ 200 200 200 200 300 300 300
(a) P = 200 + 200(P∕A,10%,3) +
300(P∕A,10%,3)(P∕F,10%,3)
(b) P = 200(P∕A,10%,4) + 300(P∕A,10%,3)
(P∕F,10%,3)
(c) P = [200(F∕A,10%,7) + 100(F∕A,10%,3)]
(P∕F,10%,6)
(d) P = [200(P∕A,10%,7) + 100(P∕A,10%,3)
(P∕F,10%,4)](F∕P,10%,1)
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