Chapter 4 - 1 Different Cash Flow Given the following cash...

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1. Different Cash Flow. Given the following cash inflow at the end of each year, what is the future value of this cash flow at 6%, 9%, and 15% interest rates at the end of the seventh year? Year 1: $15,000 Year 2: $20,000 Year 3: $30,000 Years 4 through 6: $0 Year 7: $150,000 6. Different Cash Flow. Given the following cash inflow, what is the present value of this cash flow at 5%, 10%, and 25% discount rates? Year 1: $3,000 Year 2: $5,000 Years 3 through 7: $0 Year 8: $25,000 10. Present Value. A smooth used-car salesman who smiles a lot is offering you a great deal on a “preowned” car. He says, “For only six annual payments of $2,500 this beautiful 1998 Honda Civic can be yours.” If you can borrow money at 8%, what is the price of this car? 11. Payments. Cooley Landscaping Company needs to borrow $30,000 for a new front-end dirt loader. The bank is willing to loan the funds at 8.5% interest with annual payments at the end of the year for the next ten years. What is the annual payment on this loan for Cooley
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This note was uploaded on 10/11/2011 for the course BUSINESS 2415 taught by Professor Dr.burke during the Fall '11 term at AIB College of Business.

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