Given: Cash transactions as shown in cash flow diagram.%24g = 4%/yr (positivetransactions decreasesfrom year to year)i = 10% per year134.5712131415 Yrsg = 5%/yr (negativetransactions becomemore negative)Required:(i) The net equivalent value at year 0 (Po)

Answered: Given: Cash transactions as shown in…

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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a. What is the present value of the following set of cash flows, discounted at 9.9% per year? Year 1 2 3 4 5 CF $12 $22 $32 $42 $52 b. What is the present value of the following set of cash flows, discounted at 9.9% per year? Year 1 2 3 4 CF $52 $42 $32 $22 $12 c. Each set contains the same cash flows ($12, $22, S32, $42, $52), so why is the present value different? a. What is the present value of the following set of cash flows, discounted at 9.9% per year? Year 1 2 4 CF $12 $22 $32 $42 $52 The present value of the cash flow stream is S (Round to the nearest cent.)
What is the internal rate of return (IRR) of the following set of cash flows? (Enter your answer as a percentage rounding to 2 decimals, e.g., 12.34% as 12.34) Year O cash flow = -146,000 Year 1 cash flow = -32,000 Year 2 cash flow= 60,000 Year 3 cash flow = 70,000 Year 4 cash flow = 53,000 Year 5 cash flow = 65,000
es Consider the following cash flows: Year Cash Flow 0 -$ 29,900 1 13,800 2 3 15,100 11,500 a. What is the profitability index for the cash flows if the relevant discount rate is 8 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161. b. What is the profitability index if the discount rate is 13 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161. c. What is the profitability index if the discount rate is 20 percent? Note: Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161. a. Profitability index b. Profitability index c. Profitability index T
What is the future value in year 5 of the following cash flows given a discount rate of 10%? Year 2 4 5 Cash Flow $844 $653 $987 (Do not include the dollar sign ($). Enter rounded answer as directed, but do not use the rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)
8. Calculating IRR What is the IRR of the following set of cash flows? LO 3 Year Cash Flow -$19,400 1 10,400 9,320 6,900
Consider the cash flows in the table bolow: \table[[ Year, 0, 1, 2, 3, 4, 5], [Cash Flow, - $ 100, $50, $60, $70, $80, $140 11. Consider the cash flows in the table below: Year 0 Cash Flow -$100 1 $50 2 $60 Which one of the following is correct for this cash flow (circle)? A. 100 50+ 10(A/G, 1, 5)+50(P/F, 1,5) B. (50(P/A, i, 5)+10(P/G, i, 5) +50(P/F, i, 5))/ (100)=1 C. 100(P/A, 1, 5)=50+10(A/G, I, 5) D. None of the equations are correct. 3 $70 4 $80 5 $140
Find the present worth in year 0 for the cash flows shown. Let i = 10% per year. Please solve it with formula not table, Thank you
Given the following cash flows in table below, determine the rate of return to the nearest second decimal place. Year 0 1 thru 3 4 thru 5 6 thru 10 Cash flow -23K 2K 3K 4K
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Consider the following cash flows: Year Cash Flow $32,000 13,700 18,000 11,100 a. What is the NPV at a discount rate of zero percent? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. What is the NPV at a discount rate of 10 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the NPV at a discount rate of 20 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d. What is the NPV at a discount rate of 30 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) а. Net present value b. Net present value C. Net present value d. Net present value 123
You have the following cash flows: Year 0 Net Cash Flow, $ -6,000 1 -5,000 2 +12,000 3 -2,000 +6,000 For these cash flows, it has already been determined there may be more than one positive root . Calculate the EROR using the MIRR method with i 16% and is-8%. HINT: Draw the Cash Flow diagram. You must show the mathematical setup and detailed calculations you used to calculate your EROR to two decimal points by hand. An Excel solution is not sufficient.
5. A cash flow sequence starts in year 1 at $3000 and decreases by $200 each year through year 10. (a) determine the value of the gradient G; (b) determine the amount of cash flow in year 8; and (c) determine the value of n for the gradient. |¶

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Given: Cash transactions as shown in cash flow diagram. %24 g = 4%/yr (positive transactions decreases from year to year) i = 10% per year 3 4 6. 12 13 14 15 Yrs g = 5%/yr (negative transactions become more negative)