Instructions are listed below Explanation: Giving the following information: Year Cash Flow 1 $ 1,100 2 1,330 3 1,550 4 2,290 A) i=6% FV= PV*(1 i)^n 1= 1100*1.06^4= 1388.73 2=1330*1.06^3= 1584.05 3= 1550*1.06^2= 1742.58 4= 2290*1.06= 2427.4 Total= $7,142.76 B) i= 14% FV= $8,453.29 C) i= 21% FV= $9,754.38
6956,27 Explanation:
This is a case of multiple cash flow. The future value is the sum of Cash Flows of each period. And each cash flow must be updated with the corresponding discount rate.
So we have to add the future value of each individual cash flow to determine the future value of the investment in Year 4.
(Calculations can be seen in the attached).
Instructions are listed below Explanation: Giving the following information: Year Cash Flow 1 $ 1,100 2 1,330 3 1,550 4 2,290 A) i=6% FV= PV*(1 i)^n 1= 1100*1.06^4= 1388.73 2=1330*1.06^3= 1584.05 3= 1550*1.06^2= 1742.58 4= 2290*1.06= 2427.4 Total= $7,142.76 B) i= 14% FV= $8,453.29 C) i= 21% FV= $9,754.38
Year 1 = $1,100 Year 2 = $1,330 Year 3 = $1,550 Year 4 = $2,290 (a) If the discount rate is 6 percent, then the future value of these cash flows in Year 4: To solve this problem, we must find the FV of each cash flow and add them. To find the FV of a lump sum, we use: = $6737.51 (b) If the discount rate is 14 percent, then the future value of these cash flows in Year 4: = $7415.17 (c) If the discount rate is 21 percent, then the future value of these cash flows in Year 4: = $8061.47
This post is last updated on hrtanswers.com at Date : 1st of September – 2022