Answered: What uniform series over the interval…

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?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 23E: Assume that an investment of 100,000 produces a net cash flow of 60,000 per year for two years. The...

See similar textbooks

Related questions

Q: Consider the following cash flows: Year Cash Flow -$28,600 15,100 13,800 10,200 1 2 3 a. What is the…

A: profitability index is given by present value of cash flow to initial investment. Profitability…

Q: Year Cash Flow 0 –$ 17,200 1 9,500 2 8,400 3 4,900 a. What is the profitability…

A: profitability index = Present value of cashflow / initial investment

Q: Consider end-of-year cash flows for $8000, $15000, $22000, $29000, and $36 for years 1 to 5. If the…

A: Cashflows: Year 1 = $8,000 Year 2 = $15,000 Year 3 = $22,000 Year 4 = $29,000 Year 5 = $36,000

Q: Consider the following cash flows: Year Cash Flow 0 −$28,300 1 15,400 2 13,500 3…

A: The profitability index is the ratio between the present value of future cash flows and the initial…

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 a series of cash flows that starts with $1,000 at the end of time 1 and decreases by $20…

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

Q: The following equation describes the conversion of a cash flow into an equivalent equal-payment…

A: Given equation is: A = [1000 + 20(A/G, 8%, 7)] x (P/A, 8%, 7)(A/P, 6%, 10) +[300(F/A, 8%, 3) -…

Q: A cash flow received in two years is expected to be $10,816 in nominal terms. If the real rate of…

A: Cash flows are the inflows and outflows of cash in the business. Inflows means incoming of cash and…

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: At a rate of 10.0%, what is the future value of the following cash flow stream? Years: 1 4 CFs: $0…

A: Future value is the future worth of cash flows that has occurred in the past or present.

Q: Are the following shown cash-flow diagrams economically equivalent if the interest rate is 10% per…

A: Given Information: Two cash flows diagrams with following values: Year Cash Flows A Cash Flows B…

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

Q: What is the present value of the following cash flow stream at a rate of 8.0%? Years: 3 Cash flows:…

A: Discount rate = 8.0% Year Cash flow 0 750 1 2450 2 3175 3 2741.68

Q: Consider end-of-year cash flows for $8000, $15000, $22000, $29000, and $36000 for years 1 to 5. If…

A: Given cash flows Cashflows: Year 1 = $8,000 ;Year 2 = $15,000; Year 3 = $22,000 ; Year 4 = $29,000;…

Q: At the 6 percent discount rate what will be the present value of the two-period stream of cash…

A: Cash flow streams are the series of cash flows whether cash inflows or cash outflows incurred by a…

Q: What is the present value of the following cash-flow stream if the interest rate is 4%? Year 1:…

A: Present value of cashflow stream is the sum of Present value of future cashflows

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: What is the present value of the following cash flow stream at a rate of 15.0%? Years: 1 3. CFs: $0…

A: Present value is a current worth of cash flows that are expected to occur in the future.

Q: 4. A set of cash flows are given in the table below. Using the principles of equivalence, determine…

A: As per principle of equivalence ,to calculate cash flow from year 5 to year 10 in this question we…

Q: Find the value of A so the two cash flows below are equivalent for an interest rate of 10%…

A: Interest rate (r) = 10% per annum = 2.5% per quarter We need to equate present values of both the…

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: Determine the present equivalent value of the cash-flow diagram shown below P = ? $5,000 $3500 8% iz…

A: The worth of the money changes according to time. Therefore, the time value of money shows the worth…

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: What is the payback period for the following set of cash flows? (Round your answer to 2 decimal…

A: The payback Period indicates the time period under which the initial investment or initial outlay is…

Q: At a rate of 6.5%, what is the future value of the following cash flow stream? Years 1 2 3 4 Cash…

A: Interest rate = 6.5% Year Cash flow 0 0 1 75 2 225 3 0 4 180.21

Q: 1. In the following cash flow diagram, find the value of P in year 0. Consider an interest rate of…

A: An annuity is a series of equal cash flows that occur for a certain fixed period of time. When the…

Q: What is the present value (as at year 0) of the following cash flows, given an interest rate of 8%…

A: Present value is the current worth of future cashflows discounted at a given rate.

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

A: Cash flow is the net amount of cash and cash-equivalents being transferred into and out of a…

Q: a given cash flow diagram, if the interest rate i=10% , and A=$600, th F=? A Years 2 i=10 %

A: The given series represents an annuity. An annuity is a series of uniform cash flows over a period…

Q: Refer to the accompanying cash-flow diagram (see Figure), and solve for the unknown quantity in If G…

A: The question is based on the calculation of future value of an increasing gradient cash flows.

Q: Consider the following cash flows: Year Cash Flow 0 –$ 32,000 1 14,200…

A: Calculation of NPV at different discount rates Year Cash flow PVF(0%,Year) Present value…

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: 1. Find the present value of the following cash flow streams under the following conditions: Year…

A: Cash flow streams refers to the series of cash flows whether cash inflows or cash outflows incurred…

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: The following cash flows are in actual dollars: Cash Flow (in Actual $) $25,000 4 35,000 45,000 7…

A: A constant dollar is the adjusted value which is used to compare the value of one period with that…

Q: Determine the uniform annual equivalent of the following cash flows at an interest rate of 6%.

A: Computation:

Q: - For what value of V will the following cash flow be equivalent for interest rate equal to 9%?…

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

Q: From the following cash flow diagram, find the value of C that will establisheconomic equivalence…

A: The time value of money means that the value of money decreases due to the passage of time. This…

Q: A sum of $10,000 now (time 0) is equivalent to the following shown cash-flow diagram: What is the…

A: The required amount can be calculated by equating the present values of future cash flows with the…

Q: Consider end-of-year cash flows for $8000, $15000, $22000, $29000, and $36000 for years 1 to 5. If…

A: The annuity cashflow = A= 8000 and uniform gradient = G = 7000, calculations are shown below.

Q: What is the present value of the following set of cash flows at a 10% discount rate? Year Cash Flow…

A: The computation as follows: Hence, the present value of cash flows is OMR 120.76. Hence, the option…

Q: Given the series of cash flows in the Figure, determine the future worth at the end of the eighth…

A: Future Value is the value of current investments at a certain future date at the assumed…

Q: Consider end-of-year cash flows for $8000, $15000, $22000, $29000, and $36000 for years 1 to 5. If…

A: Year Cash Flows($) 1 8000 2 15000 3 22000 4 29000 5 36000

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…

Q: Consider the following cash flow: Year Cash Flow -$ 29,800 13,900 15,000 11,400 1 2 3 a). What is…

A: Calculation of profitability index: Answer: Profitability index at 9% rate is 1.15 Profitability…

Q: What is the payback period for the following set of cash flows? (Round answer to two decomals, i.e.…

A: Payback period: It is the total time during which an investment's original investment is supposed to…

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

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?

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:INTRODUCTION

VIEW

Step 2: SOLUTION

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, finance and related others by exploring similar questions and additional content below.

Similar questions

Assume that an investment of 100,000 produces a net cash flow of 60,000 per year for two years. The discount factor for year 1 is 0.89 and for year 2 is 0.80. The NPV is a. 0 b. 6,800 c. 1,400 d. (4,000)
Consider the following cash flow profile: Suppose the positive-valued cash flows are now replaced by a geometric series. If the cash flow at end of year 1 is $10,000, what geometric rate is required for the cash flow profiles to be equivalent? Interest is at a compounded annual rate of 6%.
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
Assume the appropriate discount rate for the following cash flows is 10.2 percent. Year Cash Flow 1 $2,100 2 2,000 3 1,700 4 1,500 What is the present value of the cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
What is the present value of the following set of cash flows at an interest rate of 8% p.a. compounded annually? End of Year 1 $1,150 End of Year 2 $2,300 End of Year 3 $5,100 Select one: a. $7,401.20 b. $7,085.23 c. $8,550.00 d. $7,805.23
At the 6 percent discount rate what will be the present value of the two-period stream of cash flows? (NCF=$200)
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 -3,935 687 1,937 3,189 968 Enter the answer with 2 decimals (e.g. 1000.23).
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?
What is the net present value of the following set of cash flows at a discount rate of 5 percent? At 15percent? Multiple Choice $1, 018.47; -$628.30 $1,620.17: $2, 618.99 $1,620.17: $525.13 $722.09; - S1,708.16 $722.09: $418.05
You are given the following cash flows. What is the present value (t = 0) if the discount rate is 12 percent? 0 1 2 3 4 5 6 (Periods) 0 2,000 2,000 2,000 0 -2,000 -2,000 (cash flows) Select one: a. $4,289 b. $2,804 c. $2,656 d. $4,804 e. $5,302
What is the present value of the following cash flow stream at a rate of 15.0%? Years: 0 1 2 3 4 CFs: $0 $1,500 $3,000 $4,500 $6,000 Select one: a. $10,261 b. $12,453 c. $12,154 d. $10,859 e. $9,962
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.