Determine the present value in year zero of a gradient series that begins with a cash flow of $7,000 in year 5 and has annual increases in 8% each year through year 12. Assume the interest rate is 8% annual.
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- Consider the following three cash flow series: Determine the values of X and Y so that all three cash flows are equivalent at an interest rate of 15% per yearcompounded yearly.Consider an EOY geometric gradient, which lasts for eight years, whose initialvalue at EOY one is $250,000 and f = 6% per year thereafter. Find the equivalentuniform gradient amount over the same period if the initial value of the cash flowsat the end of year one is $200,000. Answer the following questions to determinethe value of the gradient amount, G. The interest rate is 8% per year.Calculate the present value of the following stream of cash flows: cash flows of $7,000, quarterly for 7 years. Assume an interest rate (annual) of 12% (i.e. APR with quarterly compounding). Assume that the first cash flow occurs at t = 0. Show work for all parts requiring computation. Calculate the present value of the stream of cash flows. What is the EAR for the same APR of 12% (i.e. APR with quarterly compounding)?
- Consider the following cash flow profile: Suppose the positive-valued cash flows are now replaced by a geometric series. If the cash flow at end of year 1 is $10,000, what geometric rate is required for the cash flow profiles to be equivalent? Interest is at a compounded annual rate of 6%.Consider an EOY geometric gradient, which lasts for eight years, whose initial value at EOY one is $5,000 and f= 6% per year thereafter. Find the equivalent uniform gradient amount over the same period if the initial value of the cash flows at the end of year one is $4,000. Answer the following questions to determine the value of the gradient amount, G. The interest rate is 8% per year. Solve, a. What is P0 for the geometric gradient series? b. What is P0 of the uniform (arithmetic) gradient of cash flows? c. What is the value of G?Consider an EOY geometric gradient, which lasts for eight years, whose initial value at EDY one is $5188 and geometric gradient36% per year thereafter. Find the equivalent uniform gradient amount G over the same period of the initial value of the cash-flows at EOY one is $2935, the interest rate is 8% per year.
- For the cash flows shown in the diagram, determine the equivalent uniform annual worth over years 1 through 5 at an interest rate of 10% per year.Calculate the present worth of a geometric gradient series with a cash flow of $35,000 in year 1 and increases of 5% each year through year 6. The interest rate is 10% per year.Suppose that a geometric gradient begins with $17,000 at the end of 3 years and increases by 12% every year thereafter for 9 years. If the interest rate given on this account is 20%, determine the present worth of the cash flows. Note: Do not use excel.
- Consider the following two cash flow series of payments: Series A is a geometric series increasing at a rate of 8% per year. The initial cash payment at the end of year 1 is $1,000. The payments occur annually for 5 years. Series B is a uniform series with payments of value X occurring annually at the end of years 1 through 5. You must make the payments in either Series A or Series B. Solve, a. Determine the value of X for which these two series are equivalent if your TVOM is i = 6.5%. b. Given the value of X from part a, if your TVOM is 8%, would you be indifferent between these two series of payments? If not, which do you prefer? c. Given the value of X from part a, if your TVOM is 5%, would you be indifferent between these two series of payments? If not, which do you prefer?Find the value of x that makes the equivalent annual worth in years 1 through 10 equal to $800 per year. Use an interest rate of 10% per year. The cash flows in year 0 and year 10 has an unknown value x, and 1 through 9 has an annual worth of $800. The value of x is determined to be $.....Assume that time is measured in years and that interest rates are constant. A cashflow of amount £1000 is paid each year, with the first payment made at time 1 and the last payment made at time 20. Using a constant effective interest rate of 3% per annum, calculate the present value at time 0 of the cashflows.