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q2 Question 2 a. Most financial decisions, personal as well as business, involve the time value of money. We use the rate of interest to
q2 Question 2 a. Most financial decisions, personal as well as business, involve the time value of money. We use the rate of interest to express the time value of money. The following cashflow streams need to be analysed. CASHFLOW END OF YEAR THE | STREAM 2 3 5 w OMR 100 OMR 200 OMR 200 OMR 300 OMR 300 X OMR600 - Y OMR 1200 z OMR 200 - OMR 500 - OMR 300 Calculate the future (terminal) value of each stream at the of year 5 with a compound annual interest rate of 10% (7 Marks) b. Mr. Hassen stated, Borrowers benefit and Lenders loose during a period of inflation". Evaluate the above statement using the concept of time value of money
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