Find the value of T, the equivalent uniform flow of the given set of flows, if...

Question

Question

Find the value of T, the equivalent uniform flow of the given set of flows, if the interest rate is 2% per period. -1- 2— 3—

business economics

Answer 1

Answer #1

Find the present value of the cash flow with First deposit being 0 and linear gradient being 70

PV = 0(P/A, 2%, 5) + 70*(P/G, 2%, 5)

= 70*9.2403

= 646.82

Now find the annual equivalent = 646.82 * (A/P, 2%, 5)

= 646.82*0.2122

= 137.23

Select 137.23

Answer 2

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