What is the value of the following cash flows in year 6? What is the value today? Assume interest rates today are 6.5%, then rates will be 6.25% for the next 4 years, 3.75% for the next 3 years, 5.3% for the next 4 years, and 3.75% thereafter. year cashflow 6 5,675 8 9,725 10 6,750 17 11,750 Must show work with formulas provided.

What is the value of the following cash flows in year 6? What is the value today? Assume interest rates today are 6.5%, then rates will be 6.25% for the next 4 years, 3.75% for the next 3 years, 5.3% for the next 4 years, and 3.75% thereafter. year cashflow 6 5,675 8 9,725 10 6,750 17 11,750 Must show work with formulas provided.

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...

See similar textbooks

Similar questions

What is the present value of the following cash-flow stream if the interest rate is 4%? Year 1: $170; 2: $370; 3:$270
Consider the following cash flows and interest rates: 0 r = 2.5% 1 r = 1.5% 5,000 2 r = 1.9% 5,000 3 r = 2.4% 5,000 a. Calculate the present value of these cash flows (at time 0). b. Calculate the future value of these cash flows (at time 4). 4
Determine the ERR (External rate of return) of the cash flows if external rate (e) is given as %10. Cash Flow Year 0 1 2 3 4 5 6 7 Select one: a.0.245007 b.0.19667 c.0.168017 d.0.204146 e.0.274516 f.0.181262 g.0.228861 h.0.264278 -3000 3000 6000 -1000 2000 4000 -5000 8000
1) Consider the following timeline: Date Cash flow 0 $100 2 $200 3 $300 If the current market rate of interest is 8%, then what is the present value (PV) of this timeline as of year 0?
What is the NPV of the following cash flows if the required rate of return is 0.09? Year 0 1 2 3 4 CF -6,816 3,577 3,505 2,732 3,757
What is the future value (as at year 6) of the following cash flows, given an interest rate of 7% p.a? year 0 - blank year 1 - $210 year 2 - $240 years 3-7 are blank
What is the future value of this cash flow stream at the beginning of year 7 : $100 at the end of 1 year, $150 after at the end of year 2,200 at the beginning of year 3, $300 at the end of year 3, and 500 at the beginning of year 5 assuming the appropriate interest rate is 15%? ( The answer is 604.75 but i dont know how it came) Please show the calculations manually by formula and not by excel
Consider the following cash flow diagram. What value of C makes the inflow series equivalent to the outflow series at an interest rate of 10% compounded annually? $500 2C a) b) $300 1 21 31 4₁ 51 61 7i 8₁ I I I I Years i I I I I I Y Y Y 9 10 11 I I I I I ссссссссс с Write an equation with factor notations, Solve for C
What is the NPV of the following cash flows if the required rate of return is 0.08? Year 0 1 2 3 4 CF -9,433 1,172 2,471 4,078 831 Enter the answer with 2 decimals (e.g. 1000.23).
Consider the following timeline detailing a stream of cash flows If the current market rate of interest is 6%, then the future value in period five of this stream of cash flows is:
For question 1 parts a,b,c below, show all work that justifies your results. You will show how to use series to compare values of payments over time with a lump sum payment today. The value of future payments in terms of today's dollars is known as the present value of those payments. 1. a. What is the present value formula if annual payments of C dollars continue indefinitely, assuming an average annual interest rate r? Write the answer as a series using summation notation b. Rewrite the summation formula found in part a. as a geometric series, and then find the sum. The answer will be a fraction containing C and r. c. For annuities with a present value of $1 million, calculate the annual payouts given over 25 years assuming interest rates of 1%, 5%, and 10%. Use the formula you obtained in part b. There are three answers- one for each rate, measured in dollars. Round each answer to the nearest cent.
5. Present value To find the present value of a cash flow expected to be paid or received in the future, you will the future value cash flow by (1+1)N What is the value today of a $42, 000 cash flow expected to be received 17 years from now based on an annual interest rate of 7% ? $13,296 $10,637 $132, 670 $20, 609 Your broker called carfier today and offered you the opportunity to invest in a security. As a friend, he suggested that you compare the current, or present value, cost of the security and the discounted value of its expected future cash flows before deciding whether or not to invest. The decision rule that should be used to decide whether or not to invest should be. Everything else being equal, you should invest if the discounted value of the security's expected future cash flows is greater than or equal to the current cost of the security. Everything else being equal, you should invest if the current cost of the security is greater than the present value of the security's…