Question

What is the present value of the following cash flows, given an appropriate discount rate of 3.98% (to the nearest penny)?

Year 1 | $3,593 |

Year 2 | $2,157 |

Year 3 | $7,824 |

Year 4 | $36,542 |

Year 5 | 6,369 |

Answer #1

Present value is the concept that states an amount of money today is worth more than that same amount in the future. In other words, money received in the future is not worth as much as an equal amount received today.

PV Formula and Calculation:

Present Value= FV /(1+r)^n

where:

FV=Future Value

r=Rate of return

n=Number of periods

Calculation:

PV = FV/(1+r)^n; n = 1 to 5, r = 3.98% | ||

Year | Cash Flow (FV) | Present Value of Cash flow |

1 | $3,593 | $3,455 |

2 | $2,157 | $1,995 |

3 | $7,824 | $6,960 |

4 | $36,542 | $31,260 |

5 | $6,369 | $5,240 |

Calculate the present value of the
following cash flows given a discount rate of 12%:
Year 1
Year 2
Year 3
Year 4
Cash Flows
$1,500
$8,500
$12,500
$11,000

Calculate the present value of the following cash flows given a
discount rate of 12%:
Year 1
Year 2
Year 3
Year 4
Cash Flows
$1,500
$8,500
$12,500
$11,000
Calculate the internal rate of return for a project that has
upfront costs of $7 million and cash flows of $2.5 million per year
for each of the next four years. The risk adjusted project discount
rate is 12%.

Calculate the present value of the given stream of cash flows
using the given discount rate. The present value you find is
between $24,000 and $24,100.
time
cash flows
discount rate
0
5%
1
$1,000
2
$1,500
3
$2,000
4
$2,500
5
$3,000
6
$3,500
7
$4,000
8
$4,500
9
$5,000
10
$5,500

1a. What is the present value of the following set of cash flows
if the discount rate is 13.9%? (the cash flows occur at the end of
each period) (round answer to nearest penny and enter in the
following format 12345.67)
Year 0 cash flow = -1400 (a negative cash flow)
Year 1 cash flow = 400
Year 2 cash flow = 2400
Year 3 cash flow = 1100
Year 4 cash flow = 2400
Answer:
1b. A credit card...

The appropriate discount rate for the following cash flows is 9
percent compounded quarterly.
Year
Cash Flow
1
$600
2
600
3
0
4
1,300
What is the present value of the cash flows?

The appropriate
discount rate for the following cash flows is 13 percent compounded
quarterly.
Year
Cash Flow
1
$600
2
900
3
0
4
1,200
What is the
present value of the cash flows?

The appropriate
discount rate for the following cash flows is 12 percent compounded
quarterly.
Year
Cash
Flow
1
$800
2
700
3
0
4
1,400
Required:
What is the
present value of the cash flows?
Multiple Choice
$2,178.57
$2,093.13
$2,135.85
$2,162.05
$383.67

The appropriate discount rate for the following cash flows is 8
percent compounded quarterly. Year Cash Flow 1 $ 900 2 980 3 0 4
1,570 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.)

10. What is the future value of the following cash flows if the
discount rate is 8%? What is the future value if the discount rate
is 5%? (Future value at year 4).
Cash Flow
Year 1 $12,000
Year 2 $1,000
Year 3 $2,000
Year 4 $5,500

What is the present value of a perpetual stream cash flows that
pays $4000 at the end of year one and the annual cash flows grow at
a rate of 2% per year indefinitely, if the appropriate discount
rate is 11%? What if the appropriate disscount rate is 9%?
A) If the appropriate discount rate is 11%, the present value of
the growing perpetuity is $_____? (Round to nearest cent)
B) If the appropriate discount rate is 9%, the present...

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