The table below shows the estimated income for a company over the next seven years. The company expects that it can invest the money and earn an annual interest rate of 7%.

a. Using just the Single Payment Compound Amount Factor (F/P, i%, N) for each annual amount, what is the future equivalent of the cash flow at the end of year 7?

b. Recalculate the future equivalent of the cash flow at the end of year seven using just the Uniform Series Compound Amount Factor (F/A, i%, N) and the Gradient to Future Equivalent Conversion Factor(F/G, i%, N). Is the value calculated the same as that calculated in part (a)above? If not, why?

End of Estimated annual income year $100,000 $107,000 $114,000 $121,000 $128,000 $135,000 $142,000 1 4 6 7 23 End of Estimated annual income year $100,000 $107,000 $114,000 $121,000 $128,000 $135,000 $142,000 1 4 6 7 23