Net cash flow Present value at 19% Net present value ($ thousands) Period 0 1 2 3 4 5 6 7 -13,700 -1,594 3,057 -13,700 -1,339 2,159 6,433 3,817 10,644 5,308 10,095 5,867 4,230 2,066 3,379 1,000 3,541 (sum of PVs) Restate the above net cash flows in real terms. Discount the restated cash flows at a real discount rate. Assume a 19% nominal rate and 11% expected inflation. NPV should be unchanged at +3,541, or $3,541,000. Note: Negative answers should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers in thousands rounded to the nearest whole number. Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Real Net Cash Flows NPV

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
icon
Related questions
Question

Baghiben 

Net cash flow
Present value at 19%
Net present value
($ thousands)
Period
0
1
2
3
4
5
6
7
-13,700
-1,594
3,057
-13,700
-1,339
2,159
6,433
3,817
10,644
5,308
10,095 5,867
4,230 2,066
3,379
1,000
3,541 (sum of PVs)
Restate the above net cash flows in real terms. Discount the restated cash flows at a real discount rate. Assume a 19% nominal rate
and 11% expected inflation. NPV should be unchanged at +3,541, or $3,541,000.
Note: Negative answers should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers in
thousands rounded to the nearest whole number.
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Real Net Cash Flows
NPV
Transcribed Image Text:Net cash flow Present value at 19% Net present value ($ thousands) Period 0 1 2 3 4 5 6 7 -13,700 -1,594 3,057 -13,700 -1,339 2,159 6,433 3,817 10,644 5,308 10,095 5,867 4,230 2,066 3,379 1,000 3,541 (sum of PVs) Restate the above net cash flows in real terms. Discount the restated cash flows at a real discount rate. Assume a 19% nominal rate and 11% expected inflation. NPV should be unchanged at +3,541, or $3,541,000. Note: Negative answers should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers in thousands rounded to the nearest whole number. Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Real Net Cash Flows NPV
AI-Generated Solution
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
steps

Unlock instant AI solutions

Tap the button
to generate a solution

Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education