Question
Many financial decisions require the analysis of uneven, or nonconstant, cash flows. _____ stock dividends typically increase over time, and investments in capital equipment almost
Many financial decisions require the analysis of uneven, or nonconstant, cash flows. _____ stock dividends typically increase over time, and investments in capital equipment almost always generate uneven cash flows. The term cash flow (CFt) denotes _____ cash flows, while payment (PMT) designates ______ cash flows coming at regular intervals.
The present value of an uneven cash flow stream is the sum of the PVs of the individual cash flows. The equation is:
Similarly, the future value of an uneven cash flow stream is the sum of the FVs of the individual cash flows. Many calculators have an NFV key that lets you obtain the FV. However, if your calculator doesn't have a net future value (NFV) key, you can calculate the NFV as follows:
NFV = NPV (1 + I)N.
One can also find the interest rate of the uneven cash flow stream with a financial calculator and solving for the ________
using the ______ key.
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