Question
Asked Oct 3, 2019
5 views

What is the value in year 15 of a $260 cash flow made in year 4 if interest rates are 12 percent? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

 

check_circle

Expert Answer

Step 1

Future value can be defined as the monetary value of an asset on an individual date in future assuming a specified growth rate.

It is given that,

The amount of cash flow is $26.

Growth rate is 12%.

Since the cash flow occur in year 4, the interest rate will be applicable for 11 years.

Step 2

The formula to calculate future value is given below:

help_outline

Image Transcriptionclose

п Future value Present value x (1+i Here i is interest rate n is number of years

fullscreen
Step 3

Substitute $260 for present value, 11 for n and ...

help_outline

Image Transcriptionclose

Future value $260x (1+12%) 11 S260x(1+0.12) -$260 x3.478549 =$904.42

fullscreen

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in

Business

Finance

Related Finance Q&A

Find answers to questions asked by student like you
Show more Q&A
add
question_answer

Q: New-Project Analysis Madison Manufacturing is considering a new machine that costs $350,000 and woul...

A: As per the authoring guidelines, we should answer first question only if multiple questions posted u...

question_answer

Q: Finance Question

A: Calculate the price to sales ratio as follows:

question_answer

Q: Colin thinks he can reasonably expect to buy a house in five years. He would like to have accumulate...

A: Calculation of investment (P):Answer:The amount of investment that Colin has to invest annually is $...

question_answer

Q: Executives at XYZ Corporation realize that they have too much liquid assets. They want to use this c...

A: Calculate the expected return and standard deviation as follows:

question_answer

Q: What are finances?

A: Meaning of finance:  It is a broad term that explains the system and study of investments, money, an...

question_answer

Q: Cash flows from operating-net loss On its income statement for a recent year, continental Airlines, ...

A: The contradiction between the loss and the positive cash flows is as follows:With the net loss repor...

question_answer

Q: Northeastern costs approximately $50,000 per year for a four-year program, whether completed in four...

A: Cost of per year for four-year program (pmt) = $50,000Interest rate (rate) = 10%Number of Years (npe...

question_answer

Q: In 2011, an Action Comics No. 1, featuring the first appearance of Superman, was sold at auction for...

A: Sale Price in 1938 = S1938 = $ 0.10Sale Price in 2011 = S2011 = $ 2,161,000Let g be the annual incre...

question_answer

Q: How do you get a financial advising job?

A: Introduction:Financial advisors assist people to create sensible assessments concerning to cash mana...