Question

.
Assuming a discount rate of 14%, calculate the PV of a cash flow
stream that pays $500 in one year and $1,000 in 5 years.

Answer #1

Here we will use the following formula:

**PV = FV / (1 + r%) ^{n}**

where, FV = Future value, PV = Present value, r = rate of interest = 14%, n= time period

For calculating the present value the given cash flows, we will calculate the present values of both the cash inflows and add them up. Now,putting the values in the above equation, we get,

PV = $500 / (1 + 14%)+ $1000 / (1 + 14%)^{5}

PV = $500 / (1 + 0.14)+ $1000 / (1 + 0.14)^{5}

PV = $500 / (1.14)+ $1000 / (1.14)^{5}

PV = $438.59649+ ($1000 / 1.9254145824)

PV = $438.59649 + $519.36866

PV = $957.9651

**So, required present value is $957.9651.**

a. Calculate the present value (PV?) of a cash inflow of $500 in
one year, and a cash inflow of $1,000 in 5 years, assuming a
discount rate of 15%.
b. Calculate the present value (PV?) of an annuity stream of 5
annual cash flows of $1,200, with the first cash flow received in
one year, assuming a discount rate of 10%.
c.What is the present value of a perpetual stream of annual cash
flows of $100, with the first...

11.a) Find the PV of the following stream of cash
flows, if the discount rate is 7%:
Years Cash
Flow
1-15 $ 12,000
16-35 $ 18,000
36-40 $ 20,000
b) Following up on the above stream, what would the
PV be if the 39th cash flow was missing?
c) What would the FV of part (a) be? At the same 7%
rate.
d) what would the FV be if the last...

What is the present value of the following cash flow stream at a
discount rate of 7%? $0 in year 0 $1,000 at the end of year 1
$2,500 at the end of year 2 $3,500 at the end of year 3 $4,250 at
the end of year 4 $2,500 at the end of year 5

Given the following end-of-year cash flows, what is the implicit
discount rate if the PV is $2,020?
Year
Cash Flow
1
$500
2
$750
3
$1,000
Choose one of the following answers
4.50%
4.80%
5.00% This is correct but how do we know?
5.40%

What is the PV of cash flow stream of $2000 for 5 years 6% cost
of capital? (please explain)

. Calculate the IRR and NPV for the following cash flows. Assume
a 15% discount rate
Year
Project 1
Cash flow
Project 2
Cash flow
0
-$20,000
-$20,000
1
1,000
12,000
2
3,000
15,000
3
4,000
3,000
4
12,000
4,000
5
15,000
1,000
9. If your tenant pays you rent of $24,000 a year for 10 years,
what is the present value of the series of payments discounted at
10% annually?
10. You are going to invest $300,000 in a...

Q1:
If the discount interest rate is 8%, the future value of a
stream of cash flows of $500 deposited into an account at the end
of each of the next 40 years, is closest to?
a. $23
b. $5,962
c. $6,439
d. $20,000
e. $129,528
Q2:
If the discount interest rate is 8%, the present value of a
stream of cash flows of $500 paid at the beginning of each of the
next 40 years, is closest to?
a....

Assuming a required return of 12% : PV = ?
A $25,000 annual cash flow that begins in one year and continues
for 25 years?
B. $25,000 annual cash flow that today and continues for 25
years?

1.
Calculate the PV of an annuity due if the periodic cash flow =
$9,200, the time frame = 5 years and the annual interest rate = 8%.
2. Calculate the PV of an ordinary annuity if the periodic
cash flow = $11,000, the time frame = 4 years, and the annual
interest rate = 10%.
3. Mary intends to invest $15,000 each year for 6 years at an
expected interest rate of 7% per year. If Mary invests monthly,...

2. PV and FVs of a cash flow stream (Draw the
time line in Excel. Use Excel financial functions only.) PLEASE
SHOW WORK WTH EXCEL
An investment will pay $100 at the end
of each of the next 3 years, $200 at the end of year 4, $300 at the
end of year 5, and $500 at the end of year 6. If other investments
of equal risk earn 5% annually, what is its present value? Its
future value?
PLEASE...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 12 minutes ago

asked 33 minutes ago

asked 49 minutes ago

asked 53 minutes ago

asked 56 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 2 hours ago

asked 2 hours ago