8. Demonstrate how to find the present and future values of an uneven series of cash flows?
| Example of present value | ||||
| Statement showing Cash flows | ||||
| Particulars | Time | PVF 6% | Amount | PV |
| Cash Flows | 1.00 | 0.9434 | 2,500,000.00 | 2,358,490.57 |
| Cash Flows | 2.00 | 0.8900 | 2,500,000.00 | 2,224,991.10 |
| Cash Flows | 3.00 | 0.8396 | 6,500,000.00 | 5,457,525.34 |
| Present value of Cash Flows | 10,041,007.01 | |||
| Example of future value | ||||
| Statement showing computations at 9% | ||||
| Year | Cash flow | Future Value at end of Year 4 | Working Notes | |
| 1.00 | 1,040.00 | 1,346.83 | 1040*1.09*1.09*1.09 | |
| 2.00 | 1,270.00 | 1,508.89 | 1270*1.09*1.09 | |
| 3.00 | 1,490.00 | 1,624.10 | 1490*1.09 | |
| 4.00 | 2,230.00 | 2,230.00 | 2230 | |
| 6,030.00 | 6,709.82 | |||
8. Demonstrate how to find the present and future values of an uneven series of cash...
Click here to read the eBook: Uneven Cash Flows UNEVEN CASH FLOW STREAM Find the present values of the following cash flow streams at a 10% discount rate. Round your answers to the nearest cent. 1 Stream A $0 $100 $350 $350 $350 $300 Stream B Stream A $ Stream B $ 0 $300 $350 $350 $350 $100 b. What are the PVs of the streams at a 0% discount rate? Stream A S Stream B $ O Ieon Key...
Uneven Cash Flow Stream Find the present values of the following cash flow streams. The appropriate interest rate is 6%. Round your answers to the nearest cent. (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...
Uneven Cash Flow Stream Find the present values of the following cash flow streams. The appropriate interest rate is 6%. Round your answers to the nearest cent. (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...
Problem 4-14 Uneven Cash Flow Stream a. Find the present values of the following cash flow streams. The appropriate interest rate is 6%. Round your answers to the nearest cent. (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...
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8. Uneven cash flows A series, or stream, of cash flows may not always necessarily be an annuity. Cash flows can also be uneven and nonconstant, but the concept of the time value of money applies to uneven cash flows as well Consider the following case: Swanky Beverage Co. expects the following cash flows from its manufacturing plant in Palau over the next 5 years: Year Annual Cash Flows $4,100,000 $5,000,000 $3,000,000...
Uneven cash flow streamm a. Find the present values of the following cash flow streams at 4% compounded annually. Round your answers to the nearest cent. 2 3 4 Stream A$0 150 $400 $400 $400 $300 Stream B Stream A $ Stream B $ $0 $300 $400 $400 $400 $150 b, what are the PVs of the streams at 0%, compounded annually? Stream A $ Stream B $
Present and Future Value of an Uneven Cash Flow Stream An investment will pay $200 at the end of each of the next 3 years, $400 at the end of Year 4, $500 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 this investment's present value? Its future value? Do not round intermediate calculations. Round your answers to the nearest cent. Present value: $ ...
10. Uneven cash flows A Aa E A series of cash flows may concept of the time valu s necessarily be an annuity. Cash flows can also be uneven and variable in amount, but the Il continue to apply Consider the following case: The Purple Lion Beverage Company expects the following cash flows from its manufacturing plant in Palau over the next six years: Year 1 Year 2 Annual Cash Flows Year 4 $180,000 $450,000 Year 3 Year 6 $375,000...
Find the net present value (NPV) for the following series of future cash flows, assuming the company’s cost of capital is 8.34 percent. The initial outlay is $446,634. Year 1: 154,722 Year 2: 126,062 Year 3: 188,802 Year 4: 149,733 Year 5: 173,499
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 6% 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....