How much is the asset present value reduced

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1. Calculate the future value at the end of year 3 of an investment fund earning 11% annual interest and funded with the following end-of-year deposits: $500 in at the end of year 1, $750 at the end of year 2, and $950 at the end of year 3.

2. If a company raised 10mm of PIC on the last day of 20X1, how would this affect its 20X1 FCF from its day-to-day operations?

3. Consider an asset that is expected to generate $120,000 a year, starting one year from today, growing at a rate of 5% per year forever, discounted at a rate of 10%. If you decide that the risk of the assets requires a discount rate of 11%, how much is the asset’s present value reduced ?

Reference no: EM132044691

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