Question

Problem 4-7

Present and Future Value of an Uneven Cash Flow Stream An investment will pay $100 at the end of each of the next 3 years, $400 at the end of Year 4, $600 at the end of Year 5, and $700 at the end of Year 6. If other investments of equal risk earn 7% annually, what is its present value? Round your answer to the nearest cent. $ What is its future value? Round your answer to the nearest cent. $

Answer #1

Cash Flows:

Year 1 = $100

Year 2 = $100

Year 3 = $100

Year 4 = $400

Year 5 = $600

Year 6 = $700

Interest Rate = 7%

Present Value = $100/1.07 + $100/1.07^2 + $100/1.07^3 +
$400/1.07^4 + $600/1.07^5 + $700/1.07^6

Present Value = $93.46 + $87.34 + $81.63 + $305.16 + $427.79 +
$466.44

Present Value = $1,461.82

Future Value = $100*1.07^5 + $100*1.07^4 + $100*1.07^3 +
$400*1.07^2 + $600*1.07 + $700

Future Value = $140.26 + $131.08 + $122.50 + $457.96 + $642.00 +
$700.00

Future Value = $2,193.80

Problem 4-7
Present and Future Value of an Uneven Cash Flow Stream
An investment will pay $100 at the end of each of the next 3
years, $400 at the end of Year 4, $600 at the end of Year 5, and
$800 at the end of Year 6. If other investments of equal risk earn
10% annually, what is its present value? Round your answer to the
nearest cent.
$
What is its future value? Round your answer to...

5-7 Present and Future Values of a Cash Flow
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value?

An investment will pay $150 at the end of each of the next 3
years, $250 at the end of Year 4, $400 at the end of Year 5, and
$600 at the end of Year 6. If other investments of equal risk earn
8% annually, what is its present value? Round your answer to the
nearest cent. $ If other investments of equal risk earn 8%
annually, what is its future value? Round your answer to the
nearest cent.

An investment will pay $100 at the end of each of the
next 3 years, $300 at the end of Year 4, $600 at the end of Year 5,
and $700 at the end of Year 6.
1. If other investments of equal risk earn 9%
annually, what is its present value? Round your answer to the
nearest cent.
2. What is its future value? Round your answer to the
nearest cent.

Uneven Cash Flow Stream
Find the present values of the following cash flow streams. The
appropriate interest rate is 11%. (Hint: It is fairly easy
to work this problem dealing with the individual cash flows.
However, if you have a financial calculator, read the section of
the manual that describes how to enter cash flows such as the ones
in this problem. This will take a little time, but the investment
will pay huge dividends throughout the course. Note that,...

Uneven Cash Flow Stream
Find the present values of the following cash flow streams. The
appropriate interest rate is 6%. (Hint: It is fairly easy
to work this problem dealing with the individual cash flows.
However, if you have a financial calculator, read the section of
the manual that describes how to enter cash flows such as the ones
in this problem. This will take a little time, but the investment
will pay huge dividends throughout the course. Note that,...

An investment will pay $150 at the end of each of the next 3
years, $250 at the end of Year 4, $350 at the end of Year 5, and
$600 at the end of Year 6.
If other investments of equal risk earn 9% annually, what is its
present value? Round your answer to the nearest cent.
If other investments of equal risk earn 9% annually, what is its
future value? Round your answer to the nearest cent.

An investment will pay $150 at the end of each of the next 3
years, $250 at the end of Year 4, $350 at the end of Year 5, and
$600 at the end of Year 6. If other investments of equal risk earn
11% annually, what is its present value? Round your answer to the
nearest cent.
If other investments of equal risk earn 11% annually, what is
its future value? Round your answer to the nearest cent.

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
10% annually, what is its present value? Round your answer to the
nearest cent. If other investments of equal risk earn 10% annually,
what is its future value? Round your answer to the nearest
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A. If other investments of equal risk earn 11%
annually, what is its present value? Round your answer to the
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B. If other investments of equal risk earn 11%
annually, what is its future value? Round your answer to the
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