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QUESTION 5 Consider the following sequence of year-end cash flows: 5 2 3 4 EOY $2,600 $2.300 Cash Flow $1,400 $1,700 $2,000 W
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Answer #1

Uniform annual equivalent = A

i = 4% and t = 5 years

A/(1 + 4%) + ... + A/(1 + 4%)5 = 1400/(1 + 4%) + 1700/(1 + 4%)2 + 2000/(1 + 4%)3 + 2300/(1 + 4%)4 + 2600/(1 + 4%)5

4.452 x A = 8798.95

A = 1976.48

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