The appropriate discount rate for the following cash flows is 9 percent compounded quarterly. |
Year | Cash Flow |
1 | $1,000 |
2 | 600 |
3 | 0 |
4 | 1,200 |
What is the present value of the cash flows? |
Multiple Choice
$2,257.48
$2,272.55
$639.03
$2,212.34
$2,302.63
A. $2,257.48
The cash flows are annual and the compounding period is quarterly, so we need to calculate the EAR to make the interest rate comparable with the timing of the cash flows. Using the equation for the EAR, we get:
EAR = [1 + (APR / m)]m – 1
EAR = [1 + (0.09/4)]4 – 1 = 0.0931, or 9.31%
And now we use the EAR to find the PV of each cash flow as a lump sum and add them together:
PV = $1,000 / 1.0931 + $600 / 1.09312 + $1,200 / 1.09314
PV = $2,257.48
The appropriate discount rate for the following cash flows is 9 percent compounded quarterly. Year Cash...
The appropriate discount rate for the following cash flows is 9 percent compounded quarterly. Year Cash Flow 1 $1,000 2 600 3 0 4 1,200 What is the present value of the cash flows?
The appropriate discount rate for the following cash flows is 6 percent compounded quarterly. Year Cash Flow 1 $600 2 600 3 0 4 1,300 What is the present value of the cash flows? Multiple Choice $967.94 $2,122.18 $2,079.74 $2,129.76 $2,164.62
The appropriate discount rate for the following cash flows is 6 percent compounded quarterly. Year Cash Flow 1 $800 2 500 3 0 4 1,400 What is the present value of the cash flows? Multiple Choice $2,254.63 $2,308.65 $2,346.65 $1,079.36 $2,300.64
QUESTION : The appropriate discount rate for the following cash flows is 10 percent compounded quarterly. Year Cash Flow 1 $700 2 800 3 0 4 1,200 What is the present value of the cash flows?
(5) If the appropriate discount rate for the following cash flows is 9 percent compounded quarterly, what is the present value of the cash flows? year 1 Cash Flow: $830 year 2 $910 year 3 $0 year4 $1500
The appropriate discount rate for the following cash flows Is 11 percent compounded quarterly. Year Cash Flow $1,000 500 0 1.400 2 4 Required: What is the present value of the cash flows? O $2.206.74 O $2.250.88 O $2.228.94 O $478.55 O$2,162.61
The appropriate discount rate for the following cash flows is 14 percent compounded quarterly Year Cash Flow 2 3 4 $800 500 0 1,100 Required: What is the present value of the cash flows?
The appropriate discount rate for the following cash flows is 9 percent compounded quarterly. Year Cash Flow $ 860 940 10 points 1,530 eBook Print What is the present value of the cash flows? (Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) References Present value
The appropriate discount rate for the following cash flows is 8 percent compounded quarterly. Year Cash Flow $ 800 2 880 0 1,470 What is the present value of the cash flows? (Do not round intermediate calculatic and round your answer to 2 decimal places, e.g., 32.16.) Present value
Problem 6-27 Discounted Cash Flow Analysis (L01) The appropriate discount rate for the following cash flows is 9 percent compounded quarterly. Year 1 2 3 Cash Flow $ 750 830 0 1.420 - What is the present value of the cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value