User Account

All Pages

What is the present value of cash flows

Assignment Help Finance Basics
Reference no: EM132100984

Suppose you receive $850 at the end of each year for the next four years.

a. If the interest rate is 6% per annum (interest paid annually), what is the present value of these cash flows?

b. What is the future value in four years of the present value you computed in part (a)?

c. Assume that no withdrawals are made from the savings account until the end of the fourth year. What is the interest component?

d. Compute the effective 4 years rate (total interest over 4 years). Hint: EFFECT function is not appropriate for this part as it is often used to compute an effective annual interest rate from a nominal interest rate.

Reference no: EM132100984

Questions Cloud

Sales manager redesign the organizational structure : A new sales manager at an insurance agency is evaluating existing organizational structure. How might new sales manager redesign the organizational structure?
Revenues from franchised stores : Does 'sales' here include revenues from franchised stores (say the company being analyzed is a restaurant)?
What is the moment of inertia for rotation : What is the CD's moment of inertia for rotation about a perpendicular axis through the edge of the disk? Express your answer to two significant figures.
Calculate total distance traveled : Calculate total distance traveled, total gas consumed (gallons), MPG over the past 5 minutes, and cumulative MPG.
What is the present value of cash flows : If the interest rate is 6% per annum (interest paid annually), what is the present value of these cash flows?
How many of each kind were purchased : The price of admission to a high school play was $ 3.80 for students and $ 5.60 for non students. How many of each kind were purchased
Manufacturers employ the strategy of few suppliers : Manufacturers employ the strategy of "few suppliers" for the following reasons EXCEPT ____________.
What is the acceleration of the truck : A 1200kg car pushes a 2100kg truck that has a dead battery to the right. When the driver steps on the accelerator, the drive wheels of the car push against.
Key trade off to consider in inventory management : A key TRADE OFF to consider in inventory management is ___________. MRO inventory items do not include ________.

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd