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1) Current values For each of cases given in the table below, Compute the current value of cash flow, discounting at rate given and supposing that cash flow is received at end of the period noted.

Single cash End of Case flow Discount rate period (years)
 A         $ 7,000                     12%               4
 B          28,000                      8                 20
 C          10,000                     14                12
 D        150,000                     11                 6
 E          45,000                      20                8

Answer each of the following problems.

a) Determine single investment made today, earning= 12% annual interest, will be value= $6,000 at the end of six years?

b) Compute the present value of= $6,000 to be received at the ending of six years if discount rate is 12%?

c) What is the most you would pay today for promise to repay you= $6,000 at the ending of six years if your opportunity cost is 12%?

d) Compare, contrast, and describe your findings in parts a through c.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M915253

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