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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Question
Transcribed Image Text:he present worth of the cash flow series in year O is $ 4815.59
Expert Solution
Step 1
| Year | cash flow | 15% fACTOR=1/(1+0.15) | PV=CF*F |
| 1 | 700 | (1/1.15)1 | 700*0.8695=608.65 |
| 2 | 800 | (1/1.15)2 | 800*0.7561=604.88 |
| 3 | 900 | (1/1.15)3 | 900*0.6575=591.75 |
| 4 | 1000 | (1/1.15)4 | 1000*0.5717=571.7 |
| 5 | 1100 | (1/1.15)5 | 1100*0.4971=546.81 |
| 6 | 1200 | (1/1.15)6 | 1200*0.4323=518.76 |
| 7 | 1300 | (1/1.15)7 | 1300*0.3759=488.67 |
| 8 | 1400 | (1/1.15)8 | 1400*0.3269=457.66 |
| 9 | 1500 | (1/1.15)9 | 1500*0.2842=426.39 |
| 10 | 1600 | (1/1.15)10 | 1600*0.2471=395.36 |
| 11 | 1700 | (1/1.15)11 | 1700*0.2149=365.398 |
| 12 | 1800 | (1/1.15)12 | 1800*0.1869=336.42 |
| 13 | 1900 | (1/1.15)13 | 1900*0.1625=308.75 |
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