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Consider the following cash flow: Year Cash Flow 0 -$100 1 $50 2 $60 3 $70 4 $80 5 140 If the present value is
Consider the following cash flow:
Year | Cash Flow |
0 | -$100 |
1 | $50 |
2 | $60 |
3 | $70 |
4 | $80 |
5 | 140 |
If the present value is zero, which one of the following is correct?
A. 100 = 50 + 10(A/G,i,5) + 50(P/F,i,5)
B. 1 = [ 50(P/A,i,5) + 10(P/G,i,5) + 50(P/F,i,5) ] / 100
C. 100(A/P,i,5) = 50 + 10(A/G,i,5)
D. None of the equations are correct.
Please show full work and state the reasons clearly!
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