Single Cash Flow PV = FV (1+r)n Annuity : FV = PV(1+r) n (1+r)" − 1 (1+r)n−1 * FVA = PMT FVAD = PMT (1+r) r PVA = PMT r 1 1 1 (1+r)n PVAD = PMT (1+r)*(1+r) r r r(1+r)n PMT = PV (1+r)n-1 Perpetuities PVP = PMT r

Give typing answer with explanation and conclusion

Which of the following statements are correct? The internal rate of return (IRR) generated by a positive cash flow stream of n payments. (a)is always smaller or equal than +1 (b)is always given by the solution of a quadratic equation (c)is always bigger or equal than -1 (d)can be 17 for a suitable cashflow (e)can be -2 for a suitable cashflow

Two cash flow streams below are equivalent at TVOM = i%, which has a greater value and why, X or Y? t CF1 CF2 O $X O 1 $X $2Y 2 $X $Y 3 $X $Y 4 $X $Y 5 $X $Y

SLO-5.3. The ease with which an investment can be converted into cash is called Oprofitability Ocashability Oredemption value Oliquidity

1/1 CengageNOWv2 | Online teachin X ow.com/ilrn/takeAssignment/takeAssignmentMan.uo?invoker=&takeAssignmentSessionLocator=&inprogress=false The IRR method assumes that cash flows are reinvested at OA. an average of the internal rate of return and the discount rate O B. the internal rate of return OC. the lower of the company's discount rate or internal rate of return OD. the company's discount rate

The single sum, present worth factor: a. Can be depicted as (1 + i)−n b. Can be depicted as (P|F i%,n) c. Is represented as PV using the Excel® financial function with −1 inserted for the fv parameter d. All of the above.

Define the term reinvestment rate and describe how it differs for any cash flow series between (1) a PW value calculated at the MARR, and (2) the IROR value i*.

6. Use the provided chart to solve this problem.

Consider two assets with the following cash flow streams:Asset A generates $4 at t=1, $3 at t=2, and $10at t=3. Asset B generates $2 at t=1, $X at t=2, and $10at t=3.Suppose X=6 and the interest rate r is constant. (a)For r=0.1, calculate the present value of the two assets. (b)Determine the set of all interest rates {r} such that asset A is more valuable than asset B. (c)Draw the present value of the assets as a function of the interest rate. (d)Suppose r=0.2.Find the value X such that the present value of asset B is 12. (e)Suppose the (one-period) interest rates are variable and given as follows: r01=0.1, r12=0.2, r23=0.3. Calculate the yield to maturity of asset A.