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The following cash flows are in actual dollars: Cash Flow (in Actual $) $25,000 4 35,000 45,000 7 55,000 Assume that the market interest rate is 14% and that the general inflation rate (f) is 5% per year. Convert to an equivalent cash flow in constant dollars if the base year is time 0. Keep cash flows at the same point in time - that is, years 0, 4, 5, and 7. Fill in the table below. (Round to the nearest dollar.) Cash Flow (in Constant $) 4 5 7 $

The following cash flows are in actual dollars: Cash Flow (in Actual $) $25,000 4 35,000 45,000 7 55,000 Assume that the market interest rate is 14% and that the general inflation rate (f) is 5% per year. Convert to an equivalent cash flow in constant dollars if the base year is time 0. Keep cash flows at the same point in time - that is, years 0, 4, 5, and 7. Fill in the table below. (Round to the nearest dollar.) Cash Flow (in Constant $) 4 5 7 $

Essentials Of Investments
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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Homework #2-Xiaoyu Liu 10. The following cash flows are in actual dollars: Cash Flow (in Actual $) $25.000 4 35,000 45,000 55,000 Assume that the market interest rate is 14% and that the general inflation rate (f) is 5% per year. Convert to an equivalent cash flow in constant dollars if the base year is time 0. Keep cash flows at the same point in time - that is, years 0, 4, 5, and 7. Fill in the table below. (Round to the nearest dollar.) Cash Flow (in Constant $) $4 4 $ 2$ 7 $
Transcribed Image Text:Homework #2-Xiaoyu Liu 10. The following cash flows are in actual dollars: Cash Flow (in Actual $) $25.000 4 35,000 45,000 55,000 Assume that the market interest rate is 14% and that the general inflation rate (f) is 5% per year. Convert to an equivalent cash flow in constant dollars if the base year is time 0. Keep cash flows at the same point in time - that is, years 0, 4, 5, and 7. Fill in the table below. (Round to the nearest dollar.) Cash Flow (in Constant $) $4 4 $ 2$ 7 $
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