Q4) Calculate the corresponding Annuity, for this cash flow diagram (Hint: Arithmetical gradient). i-10 % (...

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Answer 1

Answer #1

The NPV of the cash flow @10% discount rate is 41626.26. calculation is given below:

Year Present Value of Cash flow Cash flow (cash flow/1.1year) 1 15,000.00 13,636.36 2 18,000.00 14,876.03 3 12,000.00 9,015.

Hence to calculate Annuity, PV=41626.26, rate=10%, nper=4, PMT (Annuity)=?

M N O PV 41,626.26 10% rate nper PMT |=PMT(M2,M3,M1,0,0) PMT(rate, nper, pv, [fv], [type])

[ 41,626.26 10% PV rate nper PMT ($13,131.87).

Hence, the value of annuity is $13131.87

Answer 2

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