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Day traders in the stock market make investments, sometimes several in one day and / or several days per week. They are often well informed
Day traders in the stock market make investments, sometimes several in one day andor several days per week. They are often well
informed with multiple sources of information on their screens and various triggers informing them of buysell recommendations.
Over the course of the past five years, one such parttime trader has the following net cash flow profile gains minus losses and a
personal minimum attractive rate of return equal to
Part a
Your answer is incorrect.
What is the trader's present worth of these cash flows at the end of year
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Carry all interim calculations to decimal places and then round your final answer to a whole number. The tolerance is
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The present worth equivalent of the future cash flows can be determined by adding the present worths of the individual cash
flows.
To find the present worth of the individual cash flow, you may multiply the cash flow by the corresponding value of or
the tabulated value of the single sum, present worth factor, PFin provided in Appendix A
In addition, the Excel NPV financial function can be used. This function computes the net present value or net present
worth of a specified range of cash flows. Importantly, the value obtained occurs one time period prior to the first cash flow in
the range given. Its parameters, in order, are interest rate followed by the individual cash flows.
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