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Year Year 1 P = 20(1.085) + -10(20) (-.005) 1.085 - 12.5(.07) = 21.75 21.75 -20 r = = 23.33% 20-12.5 -10(21.75)(-.005) Year 2
Year Year 1 P = 20(1.085) + -10(20) (-.005) 1.085 - 12.5(.07) = 21.75 21.75 -20 r = = 23.33% 20-12.5 -10(21.75)(-.005) Year 2 P = (21.75) (1.08) + - 12.5(.065) = 23.68 Year 3 P == r = 23.68 21.75 - r = 21.75 12.5 - = 20.86% (23.68) (1.075) + 25.8123.68 23.68 - 12.5 1.08 -10(23.68) (-.005) - 12.5(.06) = 25.81 1.075 = 19.02% -10(25.81)(-.005) Year 4 P = (25.81) (1.07) + 12.5(.055) = 28.14 1.07
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Intermediate Financial Management
Authors: Eugene F. Brigham, Phillip R. Daves
11th edition
978-1111530266
