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D G H L 6.1. Future value with multiple cash flows: Konerko, Inc., expects to earn cash flows of $13,227, $15,611, 518,970, a

6.4. Present value with multiple cash flows: Saul Cervantes has just purchased some equipment for his landscaping business. F

6.7. Present value of an ordinary annuity: An investment opportunity requires a payment of $750 for 12 years, starting a year

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Answer #1

6.1

future value=13227*(1+8%)^3+15611*(1+8%)^2+18970*(1+8%)^1+19114=74472.48

6.4

present value=10450/(1+10.875%)^1+8500/(1+10.875%)^2+9675/(1+10.875%)^3+12500/(1+10.875%)^4+11635/(1+10.875%)^5

=38652.76

6.7

value of investment today

=PMT*((1-(1+r)^(-n))/r)

=750*((1-(1+8%)^(-12))/8%)

=5652.06

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