Question
QUESTION 2 Assume that the following are CPI figures of a developing country for 2018 and 2019. Calculate the year-on-year inflation rate for this country
QUESTION 2
- Assume that the following are CPI figures of a developing country for 2018 and 2019.
- Calculate the year-on-year inflation rate for this country from January to June 2019.
Report your answer with two decimal places.
| Year / Month | Index 2012=100 | Year / Month | Index 2012=100 | Inflation Rate |
| Jan-18 | 199.9 | Jan-19 | 212.4 |
|
| Feb-18 | 195.6 | Feb-19 | 208.1 |
|
| Mar-18 | 198.0 | Mar-19 | 207.5 |
|
| Apr-18 | 201.2 | Apr-19 | 211.7 |
|
| May-18 | 202.6 | May-19 | 215.1 |
|
| Jun-18 | 204.4 | Jun-19 | 216.9 |
|
- Construct an area graph using inflation rate and savings (interest) rate from December 2007 to December 2017. What does the data imply for an amount of GHS 100,000 that has been in a savings account for that period?
The following are estimated cash flows for a project. Estimates of both revenue and expenses are done under an assumption of 0% inflation.
| Year | 1 | 2 | 3 | 4 | 5 | TOTAL |
| 0% inflation |
|
|
|
|
|
|
| Revenues | $ 1,000.00 | $ 1,000.00 | $ 1,000.00 | $ 1,000.00 | $ 1,000.00 | $ 5,000.00 |
| Expenditure | $ (600.00) | $ (600.00) | $ (600.00) | $ (600.00) | $ (600.00) | $(3,000.00) |
| Debt interest | $ (60.00) | $ (49.00) | $ (38.00) | $ (26.00) | $ (13.00) | $ (186.00) |
| Debt repayment | $ (177.00) | $ (188.00) | $ (199.00) | $ (211.00) | $ (224.00) | $ (999.00) |
| Net cash flow | $ 163.00 | $ 163.00 | $ 163.00 | $ 163.00 | $ 163.00 | $ 815.00 |
- Calculate the Net Cash Flow if inflation is a sum of the last two digits of your Student ID number.
- Calculate the Net Present Value if inflation is at 15.7%.
- Calculate the Net Present Value if inflation and revenue indexation are 7% and 55% respectively.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Multinational Business Finance
Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett
16th Edition
013749601X, 978-0137496013
