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Consider an EOY geometric gradient, which lasts for eight years, whose initial value at EOY one is $5,000 and ƒ = 6% per year thereafter. Find the equivalent uniform gradient amount over the same period if the initial value of the cash flows at the end of year one is $4,000. Complete the following questions to determine the value of the gradient amount, G. The interest rate is 8% per year.

-What is the Po for the geometric gradient series?

-What is P0’ of the uniform (arithmetic) gradient of cash flows?

-What is the value of G?

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M91720464

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