Answered: 2. For the cash flows shown below,…

2. For the cash flows shown below, determine the present worth at an interest rate of 12% per year. Draw the cash flow diagram. Year 2 3 5 Cash 800 600 400 200 Flows, $

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 29P

See similar textbooks

Related questions

Q: For the cash flows shown in the diagram, determine the future worth in year 8 at an interest rate of…

A: Cash flow analysis is done in order to measure the liquidity of the entity. The cash flow chart…

Q: In the following cash flows diagram, Determine the value of F that makes the two cash flows diagrams…

A: Future value refers to the value of the current deposit of the amount or series of deposit at some…

Q: An arithmetic cash flow gradient series equals $800 in year 1, $900 in year 2, and amounts…

A: A cash flow series is a series of equal payments, that is, in a cash flow series there are regular…

Q: For the cash flows shown in the diagram, determine the future worth in year 8 at an interest rate of…

A: Future value is referred to as the current asset value at future date on the basis of an assumed…

Q: What is the present value of the following set of cash flows, discounted at 15.2% per year?…

A: Given:

Q: For the cash flows below, determine the amount in year 1, if the annual worth in years 1 through 9…

A: Annual Worth :— The annual worth is the net of all the benefits and costs incurred over a one-year…

Q: Consider the following three cash flow series: Determine the values of X and Y so that all three…

A: Cash flow for the series is computed using excel: Result is:

Q: 5. For the cash flow shown in the diagram, determine the future worth in 8 years at an interest rate…

A: A concept through which it is studied that the current worth of money is higher than its future…

Q: Compute the value of P for the accompanying cash flow diagram. Assume i = 6% per year.

A: Present value (PV), if the stated rates of return are provided, is the current value of a future…

Q: (a) Using tabulated factors for the cash flow series shown, calculate the future worth at the end of…

A: Future value refers to the future worth of current cash flow at a certain rate of interest and…

Q: EOY Net Cash FloW -$18,000 +$1,800 +$2,160 +$2,592 +$4,100 +$2,700 +S3,000 +$3,300 +$3,600 1 3 4 5 7…

A: Present worth of cash flow or outflow may be calculated by using present value factor at the given…

Q: Compute the present value for the cash flow diagram shown below if i=6%, compounded annually. $500…

A: Year Cash Flow 1 300.00 2 300.00 3 300.00 4 100.00 5 200.00 6 300.00 7 400.00 8…

Q: $500 $500 $500 $500 Year 2 3 i =12% compunded annually B P=?

A: Let CFn be the cashflow in year n. CF1 = B = - $1200 CF2 = $500 CF3 = $500 CF4 = $500 CF5 = $500 i =…

Q: Use the cash flow diagram below to calculate the present amount, which equivalent to all the cash…

A: Present Value(PV) is current value of amount that is due to paid or received in future that us…

Q: 3. Consider the following cash flow series. Determine the required annual deposits (end of year)…

A: The concept of the time value of money states that the current worth of money is more than its value…

Q: What is the present value of the following set of cash flows, discounted at 15.5% per year? Year 1…

A: Present value is the current worth of the future cash flows at a given interest rate.

Q: For the cash flows shown in the diagram, determine the value of x that will make the future worth in…

A: Future value of Annuity formula is Future value of first 5 years of Annuity x , at end of 5…

Q: What is the present value of the following set of cash flows, discounted at 15.7% per year? Year 1 4…

A: Present value is calculated by discounting the future cash flow at the given discount rate.…

Q: Consider the cash flow series shown below. Determine the required annual deposits (end of year) that…

A: The present value of an annuity is the current value of a series of cash flow discounted at a…

Q: öf thé nát is the present value of the followin annually? Beginning Cash Flow of Year 1 P2,500 2…

A: The present value of a future sum of money or stream of cash flows with a fixed rate of return is…

Q: 1. Use the cash flow diagram to determine the uniform annual amount in years 1 through 8 that is…

A: Uniform annnual amount=(cash flow×i)i=10%Uniform annual rate:=0.10(25×5+50×3)=27.5Hence uniform…

Q: Compute the future worth of the following cash flows at (a) i = 3% per year, (b) i = 12% per year,…

A: We need to use the equation of time value of money (TVM) to determine the future worth of the cash…

Q: Construct a cash flow diagram for the following cash flows: $10,000 outflow at time zero, $3000 per…

A: Outflow at time 0= ($10,000) Inflow in years 1 through 5= $3000 per year Time= 5 years Rate= 5%…

Q: For the below Cash Flow, find the total PW value using 10% interest rate years cost $ 3,065 1…

A: Present worth is sum of all cash flows discounted at certain discount rate.

Q: .Find the present worth in year 0 (PT) for the cash flow diagram using an interest rate of 15% per…

A: present value formula: present value = future value1+rn r=rate n=year

Q: What is the present value of the following set of cash flows, discounted at 15.8% per year? Year 1 3…

A: The present value method is a method of finding the profitability of a project by discounting cash…

Q: Consider the accompanying cash flow diagram (please click the link below), which represents three…

A: The value of current payment or upcoming flow of payments at any future date when flow of payment…

Q: a. What is the present value of the following set of cash flows, discounted at 9.3% per year? Year 1…

A: Companies are invested into projects for the purpose of expecting some cash flows. The projects are…

Q: What is the Net Present Value of the following cash flow streams at an interest rate of 8.25%: at…

A: Net present value (NPV) is used to determine the present value of all future cash flows. Net present…

Q: W $1,000 $1,000 1 3 4 7 End of Year End of Year $1,000

A: Computation of net present value for the left hand side is as…

Q: 1. In the following cash flow diagram, find the value of P in year 0. Consider an interest rate of…

A: An annuity is a series of equal cash flows that occur for a certain fixed period of time. When the…

Q: For the cash flows shown, determine the future worth in year 5 at an interest rate of 10% per year…

A: A concept through which it is studied that the current worth of money is higher than its future…

Q: Find the present worth of $2,500 deposits in year 1 through 10 if the interest rate is 8% per year…

A: The present worth is an important aspect of the time value of money that determines the present…

Q: The annual worth for years 1 through 8 of the cash flows shown is $30,000. What is the amount of the…

A: Cash flow is the net amount of cash and cash-equivalents being transferred into and out of a…

Q: What is the future value of the following cash flows AT THE END OF YEAR 5 assuming a 6% interest…

A: We will use the following formula : F=P(1+r100)nWhere,F=future value P=present value r=rate of…

Q: In the following cash flows diagram, Determine the Future Worth at the end of year 12 f the interest…

A: Future value = cashflow *(1+rate)^years

Q: Determine the rate of return per year for the cash flow series shown below. Year Cash Flow, $…

A: IRR is the rate at which the NPV is zero.

Q: For the cash flow series shown, determine the future worth in year 5 at an interest rate of 10% per…

A: Time value of money- It is based on the concept that money earned today is worth more than similar…

Q: Determine the rate of return per year for the cash flow series shown below. Year Cash Flow, $…

A: Internal rate of return is one of the modern techniques of capital budgeting that take into…

Q: In the following cash flows diagram, Determine the value of F that makes the two cash flows diagrams…

A: Rate ie. i =12% We have to find the Present Value of 1st diagram and then we have to calculate the…

Q: Calculate the equivalent AW at i 10% per year for the following net cash flow: Year Cash flow, $…

A: Given: Year Cash flows 0 1 -$2,000.00 2 -$2,000.00 3 -$2,000.00 4 $5,000.00 5…

Q: Given the following cash flows, what is the future value at year six when compounded at an interest…

A: The value of the cash flow after a particular time period with the addition of the interest amount…

Q: What is the future value of the following set of cash flows 4 years from now? Assume interest rate…

A: Horizon is n = 4 years from now.FVn = The future value at the end of period n, of a cash flow…

Q: Given the cash flow diagram below, evaluate the "X" value using an interest rate of 8%. Year |1 2 3…

A: Present value of cash flow is equal to the initial investment of the project. From that unknown…

Q: Answer the following questions: 1) Consider the following cash flow: You will receive $500 at the…

A: Hello. Since your question has multiple parts, we will solve the first question for you. If you want…

Q: Create a spreadsheet to solve , Consider the following EOY geometric sequence of cash flows and…

A: PV: It is the present worth of cash flows that have occurred in the past or present.

Q: An arithmetic cash flow gradient series equals $350 in year 1, $450 in year 2, and amounts…

A: The cash flows that decrease or increase by the same amount is known as arithmetic cash flows.

Q: . What is the present value of the following set of cash flows, discounted at 9.3% per year? Year 1…

A: Note: As per our guidelines, we can only answer one question at once. Since, you haven't…

Q: For the cash flows shown in the diagram, determine the equivalent uniform annual worth over years 1…

A: First, we will compute the NPV of the cash flows and then use the annuity formula to compute the…

Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

100%

2. For the cash flows shown below, determine the present worth at an interest rate of 12%
per year. Draw the cash flow diagram.
Year
1
2
3
4
5
Cash
800
600
400
200
Flows, $

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Trending now

This is a popular solution!

Step by step

Solved in 4 steps with 3 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Brook Corporation’s free cash flow for the current year (FCF0) was $3.00 million. Its investors require a 13% rate of return on (WACC = 13%). What is the estimated value of operations if investors expect FCF to grow at a constant annual rate of (1) −5%, (2) 0%, (3) 5%, or (4) 10%?
Start with the partial model in the file Ch07 P25 Build a Model.xlsx on the textbook’s Web site. Selected data for the Derby Corporation are shown here. Use the data to answer the following questions. Calculate the estimated horizon value (i.e., the value of operations at the end of the forecast period immediately after the Year-4 free cash flow). Assume growth becomes constant after Year 3. Calculate the present value of the horizon value, the present value of the free cash flows, and the estimated Year-0 value of operations. Calculate the estimated Year-0 price per share of common equity.
An investment of 1,000 produces a net cash inflow of 500 in the first year and 750 in the second year. What is the payback period? a. 1.67 years b. 0.50 year c. 2.00 years d. 1.20 years e. Cannot be determined
What is the present value of the following set of cash flows, discounted at 15.2% per year? Year 1 2 3 4 CF $109 −$109 $200 −$200 The present value of the cash flow stream is $______. (Round to the nearest cent.)
For the cash flows shown, determine the future worth in year 5 at an interest rate of 10% per year compounded continuously. Solve using (a) tabulated factors, and (b) a financial calculator. Year 1 2 3 4 5 Cash Flow, $ $300,000 0 $250,000 0 $200,000
At a rate of 8%, what is the present value of the following cash flow stream? $0 at Time 0; $100 at the end of Year 1; $300 at the end of Year 2; $0 at the end of Year 3; and $500 at the end of Year 4? use excel.
What is the present value of the following set of cash flows at an interest rate of 8% p.a. compounded annually? End of Year 1 $1,150 End of Year 2 $2,300 End of Year 3 $5,100 Select one: a. $7,401.20 b. $7,085.23 c. $8,550.00 d. $7,805.23
For the cash flows shown, find the value of x that makes the equivalent annual worth in years 1 through 7 equal to $300 per year. Use an interest rate of 10% per year. Year Cash Flow, $ Year Cash Flow, $ 0 x 4 300 1 300 5 300 2 300 6 300 3 300 7 x
What is the future value at the end of year three of the following set of cash flows at an interest rate of 12% p.a. compounded annually? End of Year 1 $150 End of Year 2 $300 End of Year 3 $500 Select one: a. $1,204.61 b. $1,402.16 c. $1,024.16 d. $950.00
What is the present value of the following set of cash flows, discounted at 15.8% per year?
Find the present equivalent worth for the annual cash flow series at an interest rate of 10% per year compounded quarterly n Net cash Flow 0 0 1 - 10 $400 11 - ∞ $500 pls draw cash flow diagram
At a rate of 9%, what is the present value of the following cash flow stream? $0 at Time 0; $1,000 at the end of Year 1; $3,000 at the end of Year 2; $0 at the end of Year 3; and $5,000 at the end of Year 4?