The following equation describes the conversion of a cash flow into an equivalent equal-payment series with N = 10: A = [1000 + 20(A/G, 8%, 7)] x (P/A, 8%, 7)(A/P, 6%, 10) +[300(F/A, 8%, 3) - 1500] (A/F, 8%, 10).Given the equation, reconstruct the original cash flow diagram.

The following equation describes the conversion of a cash flow into an equivalent equal-payment series with N = 10: A = [1000 + 20(A/G, 8%, 7)] x (P/A, 8%, 7)(A/P, 6%, 10) +[300(F/A, 8%, 3) - 1500] (A/F, 8%, 10).Given the equation, reconstruct the original cash flow diagram.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Find the PV of the following Cash Flows: $50; $150; $200 and $100 if the interest rate is 0%

A: The present value of cash flows is the discounted amount at a certain rate of interest or return for…

Q: Determine the value of X that makes the two cash flow profiles equivalent using a TVOM of 15%.

A: Given Information: Years Cash Flows A (in $) Cash Flows B (in $) 1 200 200 2 300 200 + x 3…

Q: a. Calculate the IRR for each of the three cash-flow diagrams that follow. Use EOY zero for (i) and…

A: The internal rate of return (IRR) is a financial research indicator used to determine the…

Q: For an interest rate of 10%, find the compounding factor from the table below that will be used to…

A: GIVEN, A=$1000 N= 6 R=10%

Q: Present Value Present Value of Net Cash of Net Cash Year Flows Flows $ (136,900) 44,545 40,494…

A: Break-Even Time: The period of time needed for a project to produce discounted cash flows that are…

Q: Consider the following cash flows: Year Cash Flow -$29,900 13,800 15,100 11,500 1 3 a. What is the…

A: Profitability index measures the return generated by each dollar of investment. Itcan be calculated…

Q: Consider the following cash flows: Year Cash Flow -$4,800 1,400 2,500 1,200 900 What is the payback…

A: pay back period is the number of years, it will take to recover the initial investment made in a…

Q: What uniform series over the interval [1,8] will be equivalent to a uniform series of $10,000 cash…

A: Uniform series means the uniform cash flows which are going to generate over the years from a…

Q: What is the NPV for the following set of cash flows with a discount rate of 16.7 percent? (Round…

A: The (PV) present value of an investment project's projected net cash flows is called NPV.

Q: Consider a uniform series of cash flows. The first cash flow of $10,000 occurs at time 10 and the…

Q: In computing the equivalent present worth of each given cash flow series atperiod zero, which of the…

A: Option 1: (a) P=$500(P/A, i, 4)(P/F, i, 4) - This expression is true as it first calculates the…

Q: Solve, a. Calculate the IRR for each of the three cash-flow diagrams that follow. Use EOY zero for…

A: a) The internal rate of return (IRR) is a capital budgeting metric used to gauge the benefit of…

Q: Question attached

A: The present value is the value of the sum received at time 0 or the current period. It is the value…

Q: Investment Perlod 1 2 3. 4 $(1,000) $100 $100 $100 $100 $1,100 B (1,000) 264 264 264 264 264 (1,000)…

A: Net present value: NPV = Present value of cash inflows - present value of cash outflows. Formula:…

Q: What is the amount $R that makes the two cash-flow diagrams below equivalent? The interest rate is…

A: Present value is the current worth of a cash flow at a certain rate of interest and period of time.…

Q: State the value of C that makes the following two cash flow transactions economically equivalent at…

A: The computations as follows:

Q: Consider the following cash flow profile: Using a gradient series factor, determine the present…

A: Present value is the discounted value of a single cash flow or a series of cash flow. It states that…

Q: Using an 8% discount rate, what uniform series over five periods, [1, 5], is equivalent to the cash…

A: Introduction: The cash flows given in the question has a difference with series starting with 500…

Q: Determine the value of X that makes the following two cash flow diagrams equivalent when the interes…

A: Given, The cashflow diagrams that are equivalent at r=10% per period.

Q: Based on the interest rates and cash flows shown in the cash flow diagram, determine the value of…

A: Given information: Initial outflow : $50,000 Interest rates for 9 years Cash inflows : x Cash…

Q: se the given chash flow diagram and genera vo cash follow diagrams where you can use niform gradient…

A: FV is the worth of the amount on the specified date with the specified rate of interest

Q: d uniformly. Babylon has the opportu ends, on the average, P45 for every ca

A: The answer has been mentioned below.

Q: Find the uniform annual equivalent for the following cash flow diagram if 10%. Use the appropriate…

A: UNIFORM ANNUAL EQUIVALENT FORMULA: EUAC=r×NPV1-1+r-n where, r = discount rate n = no of years

Q: F10 - 8% B B. B B B. |= 6.5 % 0 1 2 3 4 5 6 7 8 9 10 1 12 18 19 20 // A A A A 100,000

A: If the deposits are made on the time they grow with time bigger amounts and than they retuned into…

Q: In the accompanying diagram, what is the value of K on the left-hand cash-flow diagram that is…

A: Interest rate (i) = 10% Let's equate the future values of cashflows at year 7 in both the diagrams…

Q: First draw a cash flow diagram for the cash flow series shown below. Then write an expression (e.g.,…

A: a) Cash flow diagram is as follows:

Q: Compute the annual-equivalence amount for the following cash flow series at i = 12% $1.600 S1.600…

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

Q: Assume that the interest rate is greater than zero. Which of the following cash-inflow streams…

A: Present Value(PV) refers to value of sum at current date which would be received or paid in future…

Q: For the cash flows shown in the diagram below, determine the internal rate of return (in %,…

A: Internal rate of return (IRR) is a capital budgeting technique that depicts the hurdle rate at which…

Q: · Given the following cash flows, determine the equivalent uniform cash flow at 9% interest. Draw…

A: Interest rate (r) = 9% We need to find the PV of cashflows first.

Q: What is the present value of the following cash flow? $1,100 $700 (+) 4% 5% 6% 7% (-) $400 Sedo…

A: Present value of cash flow in year 0 = -600 Present Value of cash flow in year 2 Value of cash flow…

Q: Determine the value of W on the right-hand side of the accompanying diagram that makes the two…

A: Present Value: It is the present worth over the period of time of the cash flows discounted.…

Q: Determine the internal rate of return (interest rate at which NPW - $O) if the same set of cash…

A: The given problem can be solved with interpolation technique.

Q: Solve for the unknown quantity in Parts (a) through (d) that makes the equivalent value of cash…

A: Future Value = Present Value * (1+Interest%)^N 9500 = 550 * (1+i)^6 17.27 = (1+i)^6 17.27^(1/6) = 1…

Q: For a given cash flow diagram, if the interest rate i=10% , and A=$800, the F value is closest to

A: Solution : Given Present value (PV) $4000` Annuity (A) $800 Number of period (n) 5…

Q: Consider the following cash flows: Year Cash Flow 0 –$7,400 1 2,100 2 4,700 3 1,900 4 1,600 What is…

A: The payback period is the time to recover the cost of investment.

Q: Consider the following cash flows: Year Cash Flow 32,000 1 13,700 18,000 11,100 a. What is the NPV…

A: Net Present value is present value of cash flow minus initial investment

Q: ) For each of the following, determine the expected cash flows. Cash FlowEstimate…

A: Excel Spreadsheet: Excel Workings:

Q: Determine the value of Z on the left-hand side of the cash flow diagram below that establishes…

A: Cash flow diagram shows sequence of cash inflows and outflows of an project or investment at equal…

Q: Consider the following cash flows: Year Cash Flow -$6,600 1,900 3,900 1,700 1,400 What is the…

A: Year Cash flows Cumulative Cash flows 0 (6600) (6600) 1 1900 (4700) 2 3900 (800) 3 1700 900…

Q: For the arithmatic gradient of cash flow given below, if G= $550 , the value at year 23(V23) is:…

A: Value at year 23 = ? Interest Rate = 5% First Cash Flow = 1800 G = 550 N = 23

Q: 650 540 к к 430 320 210 100 2 3 4 1 2 3 5 6 7 LO 4.

A: Cash flow diagram is a time line showing all the cash inflows and cash outflows at each time…

Q: What uniform series over the interval [11,20] will be equivalent to a uniform series of $10,000 cash…

A: The present value of the annuity is the current worth of a cash flow series at a certain rate of…

Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

The following equation describes the conversion of a cash flow into an equivalent equal-payment series with N = 10:
A = [1000 + 20(A/G, 8%, 7)]
x (P/A, 8%, 7)(A/P, 6%, 10)
+[300(F/A, 8%, 3) - 1500] (A/F, 8%, 10).
Given the equation, reconstruct the original cash flow diagram.

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Refer to the accompanying cash-flow diagram (see Figure), and solve for the unknown quantity in If G = $1,000, N = 12, and i = 10% per period, thenF = ? that makes the equivalent value of cash outflows equal to the equivalent value of the cash inflow, F.
What uniform series over the interval [1,8] will be equivalent to a uniform series of $10,000 cash flows over the interval [3,10] based on: a. A 6% interest rate? b. A 10% interest rate?
What is the payback period for the following set of cash flows? (Round answer to two decomals, i.e. 32.16) Period Cash Flow 0 -6700 1 2200 2 3800 3 1000 4 4000
What is the NPV for the following set of cash flows with a discount rate of 16.7 percent? (Round answer to two decimals, i.e. 32.16) Period Cash Flow 0 -6700 1 2200 2 3800 3 9000 4 4000
Consider the following cash flows: Year Cash Flow 0 –$7,400 1 2,100 2 4,700 3 1,900 4 1,600 What is the payback period for the cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
What is the NPV of the following cash flows if the required rate of return is 0.06? Year 0 1 2 3 4 CF -9,866 2,389 4,782 3,390 871 Enter the answer with 2 decimals (e.g. 1000.23).
For the cash flows shown, determine: (a) the number of possible i* values (b) the i* value displayed by the IRR function (c) the external rate of return using the MIRR method if ii = 18% per year and ib = 10% per year. Year 0 1 2 3 4 Revenues, $ 0 25,000 19,000 4000 18,000 Costs, $ −6000 −30,000 −7000 −6000 −12,000
Calculate the NPV of the following cash flows using a 10% discount rate? The first cashflow is negative, Year 0= -900, all others are positive Year 1= +100, Year 2= +100, Year 3= +400, Year 4= +500, Year 5= +500 a. $36 b. $ 520 c. $ 996 d. $ 326 e. $ 226
Assume that the interest rate is greater than zero. Which of the following cash-inflow streams totaling $1,500 would you prefer? The cash flows are listed on order for year 1, year 2 and year 3 respectively. Select one: a. $300; $500; $ 700 b. $700; $500; $ 300 c. Any OF the above since they all sum to $1,500 d. $500; $500; $ 500
A cash flow series is described by the following: $10,000 + $250(t), where t is the number of compounding periods. The present worth of this series at the end of five periods, where interest is 2% per t, is nearest what value? (a) $11,250 (b) $50,620 (c) $56,432 (d) $60,620?
Consider the following cash flows: Year Cash Flow 0 −$28,300 1 15,400 2 13,500 3 9,900 a. What is the profitability index for the cash flows if the relevant discount rate is 9 percent? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) b. What is the profitability index if the discount rate is 14 percent? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) c. What is the profitability index if the discount rate is 25 percent? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.)
What is the NPV of the following cash flows if the required rate of return is 0.09? Year 0 1 2 3 4 CF -6,816 3,577 3,505 2,732 3,757