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Question 3: (30 PTS ) The table below summarizes the net cash flow associated with the development and sale of a new product. The interest
Question 3: (30 PTS ) The table below summarizes the net cash flow associated with the development and sale of a new product. The interest rate is 20% per year, compounded quarterly. Year 1 2 3 4 Cash Flow, $ -100,000 200,000 -25,000 100,000 a) Draw the cash flow diagram. b) Identify the following 5 parameters: r, t, CP, PP, m c) Formulate the solution for the equivalent future worth at the end of the fourth year. Question 3: (30 PTS ) The table below summarizes the net cash flow associated with the development and sale of a new product. The interest rate is 20% per year, compounded quarterly. Year 1 2 3 4 Cash Flow, $ -100,000 200,000 -25,000 100,000 a) Draw the cash flow diagram. b) Identify the following 5 parameters: r, t, CP, PP, m c) Formulate the solution for the equivalent future worth at the end of the fourth year
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