Financial Management: Theory & Practice
15th Edition
ISBN: 9781337248006
Author: Eugene F. Brigham; Michael C. Ehrhardt
Publisher: Cengage Learning US
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Chapter 4, Problem 14P
a)
Summary Introduction
To compute: The
b)
Summary Introduction
To compute: The present value of each cash flow at 0% interest rate.
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Find the present values of the following cash flow streams. The appropriate interest rate is 6%. (Hint: It is fairly easy to work this problem dealing with the individual cash flows. However, if you have a financial calculator, read the section of the manual that describes how to enter cash flows such as the ones in this problem. This will take a little time, but the investment will pay huge dividends throughout the course. Note that, when working with the calculator's cash flow register, you must enter CF0 = 0. Note also that it is quite easy to work the problem with Excel, using procedures described in the Ch04 Tool Kit.xlsx.) Do not round intermediate calculations. Round your answers to the nearest cent.
Year
Cash Stream A
Cash Stream B
1
$100
$200
2
400
400
3
400
400
4
400
400
5
200
100
Stream A: $
Stream B: $
What is the value of each cash flow stream at a 0% interest rate? Round your answers to the nearest dollar.
Stream A $
Stream B $
Find the present values of the following cash flow streams. The appropriate interest rate is 8%. (Hint: It is fairly easy to work this problem dealing with the individual cash flows. However, if you have a financial calculator, read the section of the manual that describes how to enter cash flows such as the ones in this problem. This will take a little time, but the investment will pay huge dividends throughout the course. Note that, when working with the calculator's cash flow register, you must enter CF0 = 0. Note also that it is quite easy to work the problem with Excel, using procedures described in the Ch04 Tool Kit.xlsx.) Do not round intermediate calculations. Round your answers to the nearest cent.
Year
Cash Stream A
Cash Stream B
1
$100
$250
2
400
400
3
400
400
4
400
400
5
250
100
Stream A: $
Stream B: $
What is the value of each cash flow stream at a 0% interest rate? Round your answers to the nearest dollar.
a. Find the present values of the following cash flow streams. The appropriate interest rate is 9%. (Hint: It is fairly easy to work this problem dealing with the individual cash flows. However, if you have a financial calculator,
read the section of the manual that describes how to enter cash flows such as the ones in this problem. This will take a little time, but the investment will pay huge dividends throughout the course. Note that, when
working with the calculator's cash flow register, you must enter CFo = 0. Note also that it is quite easy to work the problem with Excel, using procedures described in the Ch04 Tool Kit.xlsx.) Do not round intermediate
calculations. Round your answers to the nearest cent.
Year
Cash Stream A
Cash Stream B
1.
$100
$200
2.
400
400
400
400
4
400
400
200
100
Stream A: $
Stream B: $
b. What is the value of each cash flow stream at a 0% interest rate? Round your answers to the nearest dollar.
Stream A $
Stream B $
Chapter 4 Solutions
Financial Management: Theory & Practice
Ch. 4 - Prob. 2QCh. 4 - An annuity is defined as a series of payments of a...Ch. 4 - If a firm’s earnings per share grew from $1 to $2...Ch. 4 - Prob. 5QCh. 4 - If you deposit 10,000 in a bank account that pays...Ch. 4 - What is the present value of a security that will...Ch. 4 - Your parents will retire in 18 years. They...Ch. 4 - Prob. 4PCh. 4 - You have $42,180.53 in a brokerage account, and...Ch. 4 - What is the future value of a 7%, 5-year ordinary...
Ch. 4 - An investment will pay 100 at the end of each of...Ch. 4 - You want to buy a car, and a local bank will lend...Ch. 4 - Find the following values, using the equations,...Ch. 4 - Use both the TVM equations and a financial...Ch. 4 - Find the future value of the following annuities....Ch. 4 - Prob. 13PCh. 4 - Prob. 14PCh. 4 - Find the interest rate (or rates of return) in...Ch. 4 - Prob. 16PCh. 4 - Find the present value of 500 due in the future...Ch. 4 - Prob. 18PCh. 4 - Universal Bank pays 7% interest, compounded...Ch. 4 - Sales for Hanebury Corporation’s just-ended year...Ch. 4 - Washington-Pacific (W-P) invested $4 million to...Ch. 4 - A mortgage company offers to lend you 85,000; the...Ch. 4 - To complete your last year in business school and...Ch. 4 - Prob. 25PCh. 4 - You need to accumulate 10,000. To do so, you plan...Ch. 4 - Prob. 27PCh. 4 - Assume that you inherited some money. A friend of...Ch. 4 - Assume that your aunt sold her house on December...Ch. 4 - Your company is planning to borrow $1 million on a...Ch. 4 - Prob. 31PCh. 4 - Prob. 32PCh. 4 - You want to accumulate $1 million by your...Ch. 4 - Prob. 1MCCh. 4 - Prob. 2MCCh. 4 - We sometimes need to find out how long it will...Ch. 4 - If you want an investment to double in 3 years,...Ch. 4 - Whats the difference between an ordinary annuity...Ch. 4 - Prob. 6MCCh. 4 - Prob. 7MCCh. 4 - Define the stated (quoted) or nominal rate INOM as...Ch. 4 - Will the effective annual rate ever be equal to...Ch. 4 - (1) Construct an amortization schedule for a...Ch. 4 - Prob. 11MCCh. 4 - (1) What is the value at the end of Year 3 of the...Ch. 4 - Suppose someone offered to sell you a note calling...
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