Question 3)Suppose that next three years you will receive $100, $200, and $300 at the end of the first, second,and the third years, respectively. Assume that the yearly interest rate is %12.(a) Calculate the present value of this cash flow stream. (7 p.)(b) Calculate the annual equivalent of this cash flow stream. (4 p.)(c) Solve the questions in (a) and (b), if you receive the same amount of money, $100, at the endof each year. (3 p. + 1 p.)

Present value of cash flow stream is the net present worth of future expected cash flows i.e. value…

(a) Calculate the present value of this cash flow stream. (7 p.) (b) Calculate the annual equivalent of this cash flow stream. (4 p.) (c) Solve the questions in (a) and (b), if you receive the same amount of money, $100, at the end of each year. (3 p. +1 p.)

(a) Calculate the present value of this cash flow stream. (7 p.) (b) Calculate the annual equivalent of this cash flow stream. (4 p.) (c) Solve the questions in (a) and (b), if you receive the same amount of money, $100, at the end of each year. (3 p. +1 p.)

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 8EB: You put $600 in the bank for 3 years at 15%. A. If Interest Is added at the end of the year, how...

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