What is the present value of cash flow stream

Assignment Help Finance Basics

Reference no: EM13241219

Find the following values assuming regular, or ordinary, annuity:
a. The present value of $400 per year for ten years at 10 percent
b. The future value of $400 per year for ten years at 10 percent
c. The present value of $200 per year for five years at 5 percent
d. The future value of $200 per year for five years at 5 percent
9.6 Consider the following uneven cash flow stream:
Year Cashflow
0 $ 0
1 250
2 400
3 500
4 600
5 600

9.7 Consider another uneven cash flow stream:
Year Cash flow
0 $2,000
1 2,000
2 0
3 1,500
4 2,500
5 4,000
a. What is the present (Year 0) value of cash flow stream if the opportunity cost rate is 10 percent?
b. What is the future (Year 5) value of the cash flow stream if the cash flows are invested in an account that pays 10 percent annually?
9.9 Assume that you just won the $35 million in the Florida lottery, and hence the stae will pay you 20 annual payments of $1.75 million each beginning immediately. If the rate of return on securities of similar risk to the lottery earnings (e.g., the rate on 20-year U.S. Treasury bonds) is 6 percent, what is the present value of your winnings?

Required minimum-2 page

Reference no: EM13241219

Questions Cloud

What do you understand by the decline theory : What do you Understand by the "Decline Theory" And how it influenced the abolition of Slaverry in the Americas

What work does the racket do on the ball : A tennis player receives a shot with the ball (0.0600 kg) traveling horizontally at 56.0 m/s and returns the shot with the ball traveling horizontally at 42.0 m/s, What work does the racket do on the ball

Discuss the factors which might cause variation in the weigh : Construct a 90 percent confidence interval for the true mean weight. (b) What sample size would be necessary to estimate the true weight with an error of ± 0.03 grams with 90 percent confidence?

Cardinal principles of the national entity of japan : What similarities exist between these documents, both in terms of the ideas they contain and the events they inspired? “Cardinal Principles of the National Entity of Japan,” 1937 (pp.1016-1017)

What is the present value of cash flow stream : What is the present (Year 0) value of cash flow stream if the opportunity cost rate is 10 percent?

Find the probability that the surgury is successful : Find the probability that the surgury is successful for fewer than six patients

Find the height from which the ball was thrown : A ball is tossed from an upper-story window of a building. The ball is given an initial velocity of 8..00 m/s at an angle of 20.0 below the horizontal, Find the height from which the ball was thrown

In the belgium congo and the berlin conference : Social Darwinists argued all of the following except. In the Belgium Congo, The Berlin Conference. Tensions Qing Dynasty China in the eighteenth century were caused by

Check the normality assumption : As an experiment, a self-confessed connoisseur of cheap popcorn carefully counted 773 kernels and put them in a popper. After popping, the unpopped kernels were counted. There were 86. a)Construct a 90% confidence interval for the proportion of all k..

User Account

All Pages