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Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter22: Inflation
Section: Chapter Questions
Problem 37P: Rosalie the Retiree knows that when she retires in 16 years, her company will give her a one-time...
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As indicated, some of the cash flows are expressed in future (then-current) dollars and others in current-value (today's)
dollars. Use a real interest rate of 10% per year and an inflation rate of 6% per year.
Year
Cash Flow, $
14,500
38,500
17.500
28,500
Expressed As
Today's
Then-current
Then-current
Today's
10
13
4
NOTE: This is a multi-part question. Once an answer is submitted, you will be unable to return to this part.
Find the present worth of the estimated cash flows.
The present worth of the estimated cash flows is $
Transcribed Image Text:Required information As indicated, some of the cash flows are expressed in future (then-current) dollars and others in current-value (today's) dollars. Use a real interest rate of 10% per year and an inflation rate of 6% per year. Year Cash Flow, $ 14,500 38,500 17.500 28,500 Expressed As Today's Then-current Then-current Today's 10 13 4 NOTE: This is a multi-part question. Once an answer is submitted, you will be unable to return to this part. Find the present worth of the estimated cash flows. The present worth of the estimated cash flows is $
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