Present value of stream of annual future cash flows

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1. You want to return to school for a graduate degree in 5 years from now, and you plan to save $2,000 per month, beginning immediately (i.e., annuity due). You will make 60 deposits in an account that pays 4.8% interest, compounding monthly. Under these assumptions, how much will you have 4 years from today?

2. The amount shown on the December 31, 2012 balance sheet as “retained earnings” is equal to the firm's net income for 2012 minus any dividends it paid. a. True b. False

3. If the interest rate is 10%, what is the present value of a stream of annual future cash flows equal to $1,000, expected to be paid at the end of every year, forever?

Reference no: EM131972418

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