7. Consider a geometric series of cash flows whose first cash flow occurs at time 1 and continues through time 30. The first cash flow has a magnitude of $1,500 and this amount increases by 8% each period. Find the future equivalent value (time 30) of this series if the interest rate is 10% per period.

7. Consider a geometric series of cash flows whose first cash flow occurs at time 1 and continues through time 30. The first cash flow has a magnitude of $1,500 and this amount increases by 8% each period. Find the future equivalent value (time 30) of this series if the interest rate is 10% per period.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 23E: Assume that an investment of 100,000 produces a net cash flow of 60,000 per year for two years. The...

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Assume that an investment of 100,000 produces a net cash flow of 60,000 per year for two years. The discount factor for year 1 is 0.89 and for year 2 is 0.80. The NPV is a. 0 b. 6,800 c. 1,400 d. (4,000)
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