Assignment 2_FM_Fall 2017_2018 - SOLVED.doc - Financial Management 0308230(Assignment 2(Chapter 3&4 Question 1(2.5 points DMK Corp expects to receive

Assignment 2_FM_Fall 2017_2018 - SOLVED.doc - Financial...

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Financial Management 0308230 September 21, 2017 Assignment 2 (Chapter 3&4 ( Question 1 (2.5 points) DMK Corp. expects to receive AED 100,000 per year for 8 years and AED 150,000 per year for the next 7 years. What is the present value of this 15 year cash flow? Use a 7% discount rate. Use annuity for 7% @ 8 years (5.9713) + Annuity for 7% @ 7 years (5.38929) = 100000 5.97113 597,113.00 150000 5.38929 808,393.50 TOTAL 1,405,506.50 Question 2 (2.5 points) Ahmed will receive the following payments at the end of the next four years: AED 20,000, AED 30,000, AED 50,000 and AED 60,000. Then from the end of the fourth year through the end of the eleventh year, he will receive an annuity of AED 80,000. At a discount rate of 8 percent, what is the present value of all future benefits? Period Amount - Annuity
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Financial Management 0308230
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