Consider a series of cash flows that starts with $1,000 at the end of time 1 and decreases by $20 each period. The last cash flow inthe series occurs at time 15. If the interest rate is 8% per period, what is the present equivalent (time = 0) of the series of cashflows?

Use the table below: PV of a cash flow = cash flow at time n /(1+ rate)^n Cost 8.00000%…

Answered: Consider a series of cash flows that…

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter14: Multinational Capital Budgeting

Section: Chapter Questions

Problem 2IEE

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Consider a series of cash flows that starts with $1,000 at the end of time 1 and decreases by $20 each period. The last cash flow in the series occurs at time 15. If the interest rate is 8% per period, what is the present equivalent (time = 0) of the series of cash flows?