Solution-What is the cash flow at the end of the 4th year

What is the cash flow at the end of the 4th year

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1. At an inflation rate of 9 percent, the purchasing power of RM1 would be cut in half in 8.04 years. How long to the nearest year would it take the purchasing power of RM1 to be cut in half if the inflation rate were only 4 percent?

2. A project with a 3-year life has the following probability distributions for its possible endof-year cash flows in each of the next three years:

Year 1		Year 1		Year 1
Prob	Cash Flow	Prob	Cash Flow	Prob	Cash Flow
0.30	RM300	0.15	RM100	0.25	RM200
0.40	500	0.35	200	0.75	800
0.30	700	0.35	600
		0.15	900

Using an interest rate of 8 percent, find the expected present value of these uncertain cash flows.

3. Kamel recently invested RM2,566.70 in a project that promises 12 percent rate of return per year. The cash flows are expected to be as follows:

END OF YEAR	CASH FLOW
1	RM325
2	400
3	550
4	?
5	750
6	800

What is the cash flow at the end of the 4th year?

Reference no: EM13909712

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What is the cash flow at the end of the 4th year

Reference no: EM13909712

Reference no: EM13909712

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