Year Cash Flow 0 $0.00 1 $110.00 2 $121.00 3 $133.10 4 $146.41 5 $161.05 6 $177.16 7 $194.87 8 $214.36 9 $235.79 10 $259.37 11 $285.31 12 13 14 15 16 17 18 19 20 $313.84 $345.23 $379.75 $417.72 $459.50 $505.45 $555.99 $611.59 $672.75 The cash flow in Year 1 is equivalent to ($100.00)*(1.10), and all other cash flows then gro at an annual rate of 10 percent per year. The correct discount rate is 8 percent. What is the present value of the cash flows in the odd years? That is, what is the sum of t ten present values of the cash flows in Year 1, Year 3, ..., Year 17, and Year 19?
Year Cash Flow 0 $0.00 1 $110.00 2 $121.00 3 $133.10 4 $146.41 5 $161.05 6 $177.16 7 $194.87 8 $214.36 9 $235.79 10 $259.37 11 $285.31 12 13 14 15 16 17 18 19 20 $313.84 $345.23 $379.75 $417.72 $459.50 $505.45 $555.99 $611.59 $672.75 The cash flow in Year 1 is equivalent to ($100.00)*(1.10), and all other cash flows then gro at an annual rate of 10 percent per year. The correct discount rate is 8 percent. What is the present value of the cash flows in the odd years? That is, what is the sum of t ten present values of the cash flows in Year 1, Year 3, ..., Year 17, and Year 19?
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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Question
Transcribed Image Text:Year Cash Flow
0
$0.00
1
$110.00
2
$121.00
3
$133.10
4
$146.41
5
$161.05
6
$177.16
7
$194.87
$214.36
$235.79
$259.37
$285.31
$313.84
$345.23
$379.75
8
9
10
11
12
13
14
15
16
17
18
19
20
$417.72
$459.50
$505.45
$555.99
$611.59
$672.75
The cash flow in Year 1 is equivalent to ($100.00)*(1.10), and all other cash flows then grow
at an annual rate of 10 percent per year. The correct discount rate is 8 percent.
What is the present value of the cash flows in the odd years? That is, what is the sum of the
ten present values of the cash flows in Year 1, Year 3, ..., Year 17, and Year 19?
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