Mr. Art Deco will be paid $270,000 one year hence. This is a nominal flow, which he discounts at an 10% nominaldiscount rate:PV = $270,000 ÷ 1.10 = $245,455The inflation rate is 5%.Calculate the PV of Mr. Deco's payment using the equivalent real cash flow and real discount rate.Note: Do not round intermediate calculations. Round your "Real cash flow" and "Present value" answers to thenearest whole dollar amount. Enter the "Real discount rate" as a percent rounded to 3 decimal places.Real cash flowReal discount ratePresent value%

Given:Nominal cash flow= $270,000Nominal discount rate= 10% or 0.10inflatiion rate= 5% or 0.05Real…

Answered: Mr. Art Deco will be paid $270,000 one…

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 12MC: (1) What is the value at the end of Year 3 of the following cash flow stream if the quoted interest...

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Suppose you are offered $7,100 today but must make the following payments: 1 2 Cash Flows ($) O $7,100 1-3,800 2-2,500 3 -1,600 4 -1,400 Year 4 6. 7 9. 10 11 What is the IRR of this offer? (Do not round intermediate calculations. Enter your ans 12 a. 13 14 15 16 17 b. If the appropriate discount rate is 10 percent, should you accept this offer? 18 19 multiple choice 1 20 21 Reject Ассept 22 23 24 25 C. If the appropriate discount rate is 19 percent, should you accept this offer? 26 27 multiple choice 2 28 29 Аcсept Reject 30 31 32 33 What is the NPV of the offer if the appropriate discount rate is 10 percent? (A negative ar What is the NPV of the offer if the appropriate discount rate is 19 percent? (A negative ar 34 d-1. 35 d-2. 36
(1) What is the value at the end of Year 3 of the following cash flow stream if the quoted interest rate is 10%, compounded semiannually? (2) What is the PV of the same stream? (3) Is the stream an annuity? (4) An important rule is that you should never show a nominal rate on a time line or use it in calculations unless what condition holds? (Hint: Think of annual compounding, when INOM = EFF% = IPER.) What would be wrong with your answers to parts (1) and (2) if you used the nominal rate of 10% rather than the periodic rate, INOM/2 = 10%/2 = 5%?
What discount rate would make you indifferent between recieving $3515.00 per year forever and $5920.00 per year for 30.00 years? Assume the first payment of both cash flow streams occurs in one year. (Answer format: percentage, round to two decimal places)
Please answer this question: What is the value at the end of Year 3 of the following cash flow stream if interest is 4% compounded semiannually? (Hint: you can use the EAR and treat the cash flows as an ordinary annuity or use the periodic rate and compound the cash flows individually.) What is the PV? What would be wrong with your answer to parts I(1) and I(2) if you used the nominal rate, 4%, rather than the EAR or the periodic rate, I sow /2=4%/2=2%, to solve the problems?
What is the Discounted Present Value (DPV) if you expect to receive $8,000 in year 1, $9,000 in year 2 and $7,000 in year 3, when the interest rate is 8% in each year? Round your answer to one (1) decimal, do not write the dollar sign. Use the minus sign where appropriate.
Me
Investment X offers to pay you $3,423 per year for 11 years, whereas Investment Y offers to pay you $6,380 per year for 5 years. What is the dollar difference (higher minus lower) in the present values of these two cash flow streams if the discount rate is 7.28 percent? Answer to two decimals.
What’s the equivalent interest rate to the terms 3/20, n/60? In other words, what is the effective annual rate that is "given" to a customer for this cash discount? (Use 365 days.) HINT: Use the I = P x R x T formula where R = I/PT and choose some value for the gross amount of the invoice (i.e $1,000). Label (%) and round to the nearest whole percent.
You pay $1,000 today for the following series of monthly cash flows: 150 0 200 15 300 300 0 100 100 200 -100 What was the NPV of your decision to make this deal? ( Answer is close to $200). *Assume nominal annual discount rate of 12%. * (Edited to add discount rate.)
Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism.Answer completely and accurate answer.Rest assured, you will receive an upvote if the answer is accurate.
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You will receive $5,000 one year from now, 6000 three years from now, and 7000 five years from now in real terms. Each payment will be received at the end of the period with the first payment occurring one year from today. The relevant nominal discount rate is 9.625 percent and the inflation rate is 2.3 percent. What are your winnings worth today in real dollars? Pls do using Excel

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