Consider an EOY geometric gradient

Assignment Help Business Economics

Reference no: EM131004722

Consider an EOY geometric gradient, which lasts for eight years, whose initial value at EOY one is $5,000 and ƒ = 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. Complete the following questions to determine the value of the gradient amount, G. The interest rate is 8% per year.

-What is the Po for the geometric gradient series?

-What is P₀’ of the uniform (arithmetic) gradient of cash flows?

-What is the value of G?

Reference no: EM131004722

Questions Cloud

Always true of monopolists : Which of the following is always true of monopolists? a. they charge the highest possible price b. they always earn high profits c. they do not have to worry about demand d. they charge a price higher than marginal cost

What is the chief reason behind this better performance : Canada has a private market for the provision of health services, and until about 1970, spent the same % of GDP as the US on healthcare. Since that time, however, the rate of healthcare inflation in Canada is far lower than in the US. Does this mean ..

Under oligopolistic market conditions : Under oligopolistic market conditions, a. the pricing actions of any one firm have no significant effect on the others b. the pricing actions of any one firm have a significant effect on the others c. no firm can have any control over its output pric..

Region might lead to an increase in the regions welfare : A number of Latin American nations export coffee and import other goods. A long-term drought now reduces coffee production in the countries of this region. Assume that they remain exporters of coffee. Explain why the long-term drought in the region m..

Consider an EOY geometric gradient : Consider an EOY geometric gradient, which lasts for eight years, whose initial value at EOY one is $5,000 and ƒ = 6% per year thereafter. Find the equivalent uniform gradient amount over the same period if the initial value of the cash flows at the e..

Graph the production possibilities frontier : Suppose that each worker in the Foreign country can produce two cars or three TVs. Assume that Foreign also has four workers. Graph the production possibilities frontier for the foreign country. What is the no-trade relative price of cars in Foreign?

What is the present worth of this purchase : You have decided to purchase a large screen TV and the Rent to Own store. The TV would cost $1,200 but you will be making payments of $150 a month for a year. Asuming your MARR is 27%, compounded monthly, what is the present worth of this purchase?

What are the major categories of commercial damages : As the textbook authors point out, calculating commercial damages takes creative analysis as well as a step-by-step scientific approach. Each situation will be different. What are the major categories of commercial damages?

What is the interest rate on two year bond-five year bonds : The one year interest rate over the next five years is expected to be 7%, 8%, 9%,10% and 11%. Investors preferences for holding short term bonds have the liquidity premiums for one year to five year bonds as 0%, 0.25%, 0.5%, 0.75%, and 1%, respective..

User Account

All Pages