Borrow lump sum of 250000 and repay in 7 year annual installments. EAR 4.04% 0 250,000...
Borrow lump sum of 250000 and repay in 7 year annual installments. EAR 4.04%
0 250,000
ANNUAL CASH FLOW
1 25000
2 50000
3 75000
4
5
6
7
What is the NPV of year 0-3 cash flow and FV of NPV in 3 years.
I am having a hard time setting up this question, I knwo the last four payments will be equal amounts of $35,147. Please help.
Homework Answers
Year Cash Flow PV
0 -250000 -250000.00
1 25000 24029.21953
2 50000 46192.2713
3 75000 66597.85366
4 Total -113180.66
5
6
7
NPV of year 0-3 cash flows -113180.66
FV of NPV after 3 years -127459.80 113180.66*(1+4.04%)^3
Equal payments $35,147
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