What is the CW, when i=10% per year, of $1,500 per year starting in one year and continuing forever, and $10,000 at the end of year 5 repeating every 4 years thereafter, and continuing forever? a. Draw a cash flow diagram b. Explain in words how you would approach the problem c. When i=10%, what value of N, practically speaking, defines "forever"?
What is the CW, when i=10% per year, of $1,500 per year starting in one year and continuing forever, and $10,000 at the end of year 5 repeating every 4 years thereafter, and continuing forever? a. Draw a cash flow diagram b. Explain in words how you would approach the problem c. When i=10%, what value of N, practically speaking, defines "forever"?
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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E Expert Q&A
What is the CW, when i=10% per year, of $1,500 per year
starting in one year and continuing forever, and $10,000 at
the end of year 5 repeating every 4 years thereafter, and
continuing forever?
a. Draw a cash flow diagram
b. Explain in words how you would approach the problem
c. When i =10%, what value of N, practically speaking,
defines "forever"?
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