Homework Answers
The cash flow is nonconventional.
A conventional project will have a negative cash flow in year 0, followed by a series of positive cash flows in subsequent years. In this case the cash flo in year 1 is positive and the cash flows in subsequent years are negative. Hence, the series of cash flows is nonconventional.
The cumulative cash flows: The last row in the table below contains your answers.
Please see the table below. Please be guided by the second column titled “Linkage” to understand the mathematics. The last row highlighted in yellow is your answer. Figures in parenthesis, if any, mean negative values. All financials are in $.
| Year | Linkage | 0 | 1 | 2 | 3 | 4 | 5 |
| Revenues | A | 250 | 250 | 300 | 400 | 100 | 150 |
| Costs | B | 1,500 | (450) | (300) | (500) | (200) | (400) |
| Cash flows | C = A + B | 1,750 | (200) | - | (100) | (100) | (250) |
| Cumulative Cash flows | D = Cumulative C | 1,750 | 1,550 | 1,550 | 1,450 | 1,350 | 1,100 |
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Required information [The following information applies to the
questions displayed below.] Reba Dixon is a fifth-grade school
teacher who earned a salary of $38,400 in 2018. She is 45 years old
and has been divorced for four years. She receives $1,300 of
alimony payments each month from her former husband (divorced in
2016). Reba also rents out a small apartment building. This year
Reba received $50,200 of rental payments from tenants and she
incurred $19,578 of expenses associated with the...
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