Annual cash flows-what is the future value of the account

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Reference no: EM13730625

The following annual cash flows [$85, $160, $230, $285, $255] are the basis for the following questions:

A) If the interest rate on deposits is 5.5% and the payment day 1 is $85 instead of after one year, what is the future value of the account at the end of five years?

B) If the hurdle rate is 5.5% what is the PV of these cash flows?

C) If it cost $950 to buy this cash flow would you invest?

D) What is the internal rate of return on this cash flow if the first and second amounts are negative and $85 first payment is paid out immediately?

E) If this is the cash flow is from an investment in a piece of machinery costing $600 what is the payback period?

Reference no: EM13730625

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