Question
1. Find the present value of the following stream of cash flows, assuming that the firms opportunity cost is 14 percent. (SHOW YOUR CALCULATION) Years
1.
Find the present value of the following stream of cash flows, assuming that the firms opportunity cost is 14 percent. (SHOW YOUR CALCULATION)
Years 1-5 $20,000 per year
Years 6-10 $35,000 per year
2.
Darlene wishes to accumulate $50,000 by the end of 10 years by making equal annual endofyear deposits over the next 10 years. If Darlene can earn 5 percent on her investments, how much must she deposit at the end of each year? (SHOW YOUR CALCULATIONS)
3.
Betty borrows $50,000 at 10 percent annually compounded interest to be repaid in four equal annual installments. The actual endofyear loan payment is (SHOW YOUR CALCULATIONS)
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