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Generate the series of cash flows on your note book as follows CFt = wt*Io I0 = 44901 Cft wt year 44901 - 1 0
Generate the series of cash flows on your note book as follows CFt = wt*Io
I0 = 44901
Cft | wt | year |
44901 - | 1 | 0 |
23797.53 | 0.53 | 1 |
33226.74 | 0.74 | 2 |
24246.54 | 0.54 | 3 |
The weigts wt are fixed by the chief financial officer |
Required
Suppose that you can invest in project say B (over 10 years) with the same ( I0 = 44901 ) and it generates a constant annual cash flow equal to 20% on ( I0 = 44901 )
If the required rate of return is fixed at 10%.
-1 Find the annual cash flow
-2 The net present value
-3 The profitability index
-4 The Equivalent annual annuity
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