Example 7: This is an example of a non-simple investment since –the initial cash flow is...
Example 7: This is an example of a non-simple investment since –the initial cash flow is negative, but –more than one sign change occurs in the net cash flow series. NPW = -100 + 405(P/F,i,1) - 500(P/F,i,2) + 200(P/F,i,3) - 100(P/F,i,4) + 100 (P/F,i,5)
Homework Answers
The cash flow diagram for the given formula is as shown above at an interest rate of i% per year.
The upward cash flows are positive in nature and the downward cash flows are negative in nature.
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Example 7: This is an example of a non-simple investment since
–the initial cash flow is...
14. Consider four projects with the following sequences of cash flows: n 0 NET CASH FLOWS...
14. Consider four projects with the following sequences of cash flows: n 0 NET CASH FLOWS A B C -$25,000|-$23,000-$56,500 $12,000 $32,000 -$2,500 $23,000 $32,000-$6,459 $34,000 $25,000 $88,345 3 (a) Identify all the simple investments. (b) Identify all the non-simple investments. (c) Compute the Internal Rate of Return (IRR) for each project using NPV method and Excel. Note the following: A simple (or conventional) investment is simply when one sign change occurs in the net cash flow series. If the...
Given the cash flow below calculate the rate of return (IRR) on the Investment Year Cash...
Given the cash flow below calculate the rate of return (IRR) on the Investment Year Cash flow -$450 $300 $200 $100 WN 100 300 200 Solve for P i = 7%
Write the expression for the cash flow. 7) (25 points) First draw a cash flow diagram...
Write the expression for the cash flow.
7) (25 points) First draw a cash flow diagram for the cash flow series shown below. Then write an expression (e.g., P 500(P/A 5%, 3)+100(P/G 5%, 3) + ...) for the present worth of the following cash flow series. You must use at least one uniform series factor, one arithmetic gradient series factor, and one geometric gradient series factor. i=5% per period. No calculations are needed. EOY Cash Flow 4 5,00025,000 15,000 13,500...
EXAMPLE 18 Compute the rate of return for the investment represented by the following cash flow:...
EXAMPLE 18 Compute the rate of return for the investment represented by the following cash flow: Year 0 Cash Flow - $595 +250 +200 +150 +100 +50-
EXAMPLE 18 Compute the rate of return for the investment represented by the following cash flow:...
EXAMPLE 18 Compute the rate of return for the investment represented by the following cash flow: Year Cash Flow -$595 0 1 +250 +200 +150 +100 +50- 2 3 4 5
16) You are offered an investment that will pay the following cash flows at the end...
16) You are offered an investment that will pay the following cash flows at the end of each of the next five years at a cost of $800. What is the Net Present Value (NPV) if the required rate of return is 12% per year? Period Cash Flow 0 $0 1 $100 2 $200 3 $300 4 $400 5 $500 Remember that Excel’s NPV function doesn't really calculate the net present value. Instead, it simply calculates the present value of...
I. An investment has the following cash flow series where interest is 8%; Cash End of...
I. An investment has the following cash flow series where interest is 8%; Cash End of Year 0 Flow $300 $300 $600 $500 $300 $0 $800 $700 $600 2 4 7 8 a. Find the future worth of this cash flow series using the actual cash flows. b. Find the present worth of this series using the actual cash flows c. Find the present worth using the future worth. d. Find the worth of the series at the end of...
7) (30 points) First draw a cash flow diagram for the cash flow series given below....
7) (30 points) First draw a cash flow diagram for the cash flow series given below. Then, write an expression (e.g., F-500(PA 5%, 3) + 100(FIG 5%, 3)) to compute the future value of the cash flow series at the end of year 10. You must use at least one uniform series factor, one arithmetic gradient series factor, and one geometric gradient series factor and 10% per year compounded annually. No calculations are needed. 10 Cash 1,000 3,000 3,300 -3,600...
Match the words/phrases with its most appropriate description. You may match one word/phrase with more than...
Match the words/phrases with its most appropriate description. You may match one word/phrase with more than one description. You may not use all the words/phrases non-simple investment.A another word/phrase for the annual rate of return accumulated cash flow sign test.B on an investment vield.C the interest earned on the unpaid balance of a loan simple investment.D break-even interest rate that equates the present rate of return worth of a project's cash flow outflows to the .present worth of its inflows...
marr 13% the MARR is 12% Consider the following investment projects: 1 AC DE 0-1500-2000-2100-1000 1...
marr 13%
the
MARR is 12%
Consider the following investment projects: 1 AC DE 0-1500-2000-2100-1000 1 3000 1560 2800 3600 2-1500 944 -200 -5700 3 15 0 0 100 a) For each project, apply the sign rule to predict the number of possible IRR's b) Classify each project as either a simple or a non-simple investment. c) For each project, plot the NPW profile as a function of i between 0 and 120%. d) For each project, compute the value(s)...
14. Consider four projects with the following sequences of cash flows: n 0 NET CASH FLOWS A B C -$25,000|-$23,000-$56,500 $12,000 $32,000 -$2,500 $23,000 $32,000-$6,459 $34,000 $25,000 $88,345 3 (a) Identify all the simple investments. (b) Identify all the non-simple investments. (c) Compute the Internal Rate of Return (IRR) for each project using NPV method and Excel. Note the following: A simple (or conventional) investment is simply when one sign change occurs in the net cash flow series. If the...
Given the cash flow below calculate the rate of return (IRR) on the Investment Year Cash flow -$450 $300 $200 $100 WN 100 300 200 Solve for P i = 7%
Write the expression for the cash flow.
7) (25 points) First draw a cash flow diagram for the cash flow series shown below. Then write an expression (e.g., P 500(P/A 5%, 3)+100(P/G 5%, 3) + ...) for the present worth of the following cash flow series. You must use at least one uniform series factor, one arithmetic gradient series factor, and one geometric gradient series factor. i=5% per period. No calculations are needed. EOY Cash Flow 4 5,00025,000 15,000 13,500...
EXAMPLE 18 Compute the rate of return for the investment represented by the following cash flow: Year 0 Cash Flow - $595 +250 +200 +150 +100 +50-
EXAMPLE 18 Compute the rate of return for the investment represented by the following cash flow: Year Cash Flow -$595 0 1 +250 +200 +150 +100 +50- 2 3 4 5
I. An investment has the following cash flow series where interest is 8%; Cash End of Year 0 Flow $300 $300 $600 $500 $300 $0 $800 $700 $600 2 4 7 8 a. Find the future worth of this cash flow series using the actual cash flows. b. Find the present worth of this series using the actual cash flows c. Find the present worth using the future worth. d. Find the worth of the series at the end of...
7) (30 points) First draw a cash flow diagram for the cash flow series given below. Then, write an expression (e.g., F-500(PA 5%, 3) + 100(FIG 5%, 3)) to compute the future value of the cash flow series at the end of year 10. You must use at least one uniform series factor, one arithmetic gradient series factor, and one geometric gradient series factor and 10% per year compounded annually. No calculations are needed. 10 Cash 1,000 3,000 3,300 -3,600...
Match the words/phrases with its most appropriate description. You may match one word/phrase with more than one description. You may not use all the words/phrases non-simple investment.A another word/phrase for the annual rate of return accumulated cash flow sign test.B on an investment vield.C the interest earned on the unpaid balance of a loan simple investment.D break-even interest rate that equates the present rate of return worth of a project's cash flow outflows to the .present worth of its inflows...
marr 13%
the
MARR is 12%
Consider the following investment projects: 1 AC DE 0-1500-2000-2100-1000 1 3000 1560 2800 3600 2-1500 944 -200 -5700 3 15 0 0 100 a) For each project, apply the sign rule to predict the number of possible IRR's b) Classify each project as either a simple or a non-simple investment. c) For each project, plot the NPW profile as a function of i between 0 and 120%. d) For each project, compute the value(s)...
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