Answered: instead of having this payments with a…

instead of having this payments with a gape at year 3 What is the equivalent uniform annual cost for 6 years starting one year from now if i-20% per year? Oa 5.125 Ob 5,200 Oc 4130 Od 4,146

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 15PROB

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Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

Question

instead of having this payments with a gape at year 3 What is the equivalent uniform annual cost for 6 years starting one year from now if i=20% per year?
Oa 5,125
Ob 5.200
Oc 4130
Od. 4,146

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