What is the present worth of the cash flow

Assignment Help Econometrics

Reference no: EM13192695

Consider the projects after tax cash flow and the expected annual general inflation rate during the project period:
End of Year Expected cash flow General Inflation Rate
0 $(45,000.00)
1 $26,000.00 6.50%
2 $26,000.00 7.70%
3 $26,000.00 8.10%

First we have to determine the general inflation rate over the project period, then we need to convert the cash flows into actual dollars into equivelant constant dollars with year zero as the base year. Then if the annual inflation free interest rate is 5%, what is the present worth of the cash flow?

Reference no: EM13192695

Questions Cloud

Develop a java application : Your task is to develop a Java Application that allows the user to read travel booking data from a text file, save data in a file, display data in a text area, sort data by booking name and search data by booking name.

State what is the pressure in atm inside the kernel right : A typical popcorn kernel has a volume of .250 mL and contains 1.114 mg of water. The kernel will pop at a temperature of 170 C. What is the pressure in atm inside the kernel right before it explodes?

Define what is the identity of the precipitate : What is the identity of the precipitate and what is the change in enthalpy of the reaction per mole of copper? Assume the calorimeter absorbs negligible quantity of heat and the specific heat and density of the solution are that as pure water.

State what is the mass of the precipate is formed : What is the mass of the precipate is formed when 170.0mL of 0.200 M MgSO4 reacts wit excess Na3PO4?

What is the present worth of the cash flow : First we have to determine the general inflation rate over the project period, then we need to convert the cash flows into actual dollars into equivelant constant dollars with year zero as the base year. Then if the annual inflation free interest ..

Explain making solutions of varying molarity : Do you use the same type of glassware when making solutions of varying molarity? Should you use a volumetric pipette or flask

Define sail was a completely absorbing fabric of area : Suppose that you designed a spacecraft to work by photon pressure. The sail was a completely absorbing fabric of area 1.0 km^2 and you directed a red laser beam of wavelength 650 nm on it from a base on the moon. What is the (a) force, (b) pressur..

What is called the extra cost of one more unit of output : Assume that product Alpha and product Beta are both priced at $1 per unit and that Ellie has $20 to spend on them. She currently buys 8 units of Alpha and 12 units of Beta. The marginal utility of Alpha is 40, and the marginal utility of Beta is 2..

Explain constructing a born-haber cycle : Compare lattice energies of LiI and PbI2 and calculate the formation enthalpy in each case by constructing a Born-Haber cycle. Which one is more ionic? Comment.

User Account

All Pages