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Drupady [299]
3 years ago
7

Many financial decisions require the analysis of uneven,or nonconstant: cash flows stock dividends typically increase over time

and investments in capital equipment almost always generate uneven cash flows. The term cash flow (CFt) denotes cash flows, while payment (PMT) designates cash flows coming at regular intervals The present value of an uneven cash flow stream is the sum of the PVs of the individual cash flows. The equation is: PV = Similarly, the future value of an uneven cash flow stream is the sum of the FVs of the individual cash flows. Many calculators have an NFV key that lets you obtain the FV. However, if your calculator doesn't have a net future value (NFV) key, you can calculate the NFV as follows: NFV-NPV × (1+1) One can also find the interest rate of the uneven cash flow stream with a financial calculator and solving Quantitative Problem: You own a security with the cash flows shown below 700 355 240 320 If you equire an annual retum of 10%, what is the present value of this cash flow stream? Round your answer to the nearest cent. Do not round intermediate calculations.
Business
1 answer:
pshichka [43]3 years ago
3 0

Answer:

       

           \large\boxed{\large\boxed{\$ 1,328.63}}

Explanation:

Since the four<em>-cash-flow stream</em> is <em>uneven</em>, the manual calculation involves the calculation of four separate present values which you have to add.

The <em>cash flows </em>are:

  • Year 1: 700
  • Year 2: 355
  • Year 3: 240
  • Year 4: 320

The required rate of return is r = 10% = 0.10

The formula that you must use is:

               PV=\frac{CF_1}{(1+i)^1}+\frac{CF_2}{(1+i)^2}+\frac{CF_3}{(1+i)^3}+\frac{CF_4}{(1+i)^4}

Where <em>PV </em>is the <em>present value</em>; CF₁, CF₂, CF₃, CF₄ are the cash flows of the years 1, 2, 3, and 4 respectively, and i is the annual return.

Substituting:

             PV=\frac{700}{(1+0.10)^1} +\frac{355}{(1+0.10)^2} +\frac{240}{(1+0.10)^3} +\frac{320}{(1+0.10)^4}

             PV=\$ 636.36+\$ 293.39+\$ 180.31+\$ 218.56=\$ 1,328.63

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1. Identify and briefly discuss three factors which influence the choice of crops produced by commercial farmers?[ 2. What is th
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Answer:

1. a) Location,

    b) earnings

    c) Whether the crop can be produced by its resources or not

Explanation:

Farmer traders consider location as an important element for their crops, the location depends on the quality of the land and the taxes it will pay, and the location of their crop is important for the transport of their products to ensure they arrive in the best condition to the market.

Likewise, the farmer considers as an influential factor how much profit he will obtain with the harvested product, choosing to cultivate the one that produces the greatest benefits, also he must consider having all the labor and resources that are necessary to carry out his harvest and be able to transport it to market it.      

2. Dairy producers need to consider the proximity of farms to the distribution market because the product has a limited time to go expire .

Explanation:

Dairy products are the most delicate and difficult to transport since they have a short time to expire, this is one of the reasons that commercial farmers should take into account that the location of their farm is at a considerable distance from the market, in this way being able to transport their product more safely and distribute it without fear that it expires and lose all their profits.

3. A commercial farmer is concerned with two costs, one of which is the cost of transportation and the other cost is whether there will be a benefit to his crop.

Explanation:  

Commercial farmers at the time of cultivation consider two very important costs for them, one of them the cost of transporting their products to the place of distribution, so they must ensure that it is not very high since it is also important for them the benefit they will get, for this reason, farmers take care that the investment is less so they can enjoy good profits.

   

4. Von Thunen's theory mentions that the distance to the market is a critical point for farmers. Von Thunen explains that a farmer's earnings may decrease the further from the market where he sells his products.

Explanation:

5.  1. One of Von Thunen's assumptions is that there is only one market available and it is self-sufficient without outside influence.

    2. Another assumption is the physical environment is uniform; without rivers, mountains, etc.

    3. And one last assumption is that all farmers act to maximize profits.

Explanation:

1. In Von Thunen's first assumption, he considers there is only one market available and it does not need external influences, but this assumption may not be so correct since there cannot be a single market due to the consumer demand that exists and because there are other farmers from different cities that will bring their products, also cities need an external influence for change, and changes are necessary for the growth of the city.

2. In his theory, Von Thunen mentions the physical environment of the places for agricultural production is uniform, which is difficult due to the landforms that create modifications in the terrain, this uniformity that Thunen mentions could only be achieved if the grounds were modified by men.

3. Thunen's last assumption mentions a very successful situation where farmers carry out actions to obtain the greatest profits, they will continue working to continue obtaining the best benefits.

6. 1. In the middle ring is the market. The market is central because it is the most important part of the city and is easily accessible from the surrounding areas.

   2. The next ring consists of intensive farming and dairy. These products are closer because they are in higher demand and other products can expire.

  3. The next ring is the forest. Wood was also in high demand due to the fact that it was used for heating and cooking. And it had this location because the wood was very heavy and difficult to transport.

  4. The penultimate ring was used for extensive cultivation as bread grains. These are lighter, which makes them easier to transport and cost less money.

  5. And finally, the final outer ring is used for livestock. Animals can be born and raised further from the market because they transport themselves, which means there is no need for fuel, saving the farmer money.

Explanation:  

Von Thunen in his theory mentioned the importance of geographical distribution in agriculture, in which merchant farmers could take advantage of the conditions of the land. For Thunen the distribution and location of the land in an appropriate way would generate the best benefits, for it must organize from the most essential and difficult to transport to the easiest to transport, in this way, for Von Thunen the rings in the markets should be formed.

   

<em>I hope this information can help you.</em>

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Answer:

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