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IRINA_888 [86]
3 years ago
9

A project has the following cash flow. Year zero's cash flow is $10000. The following years' cash flows decrease by $2000 each y

ear. At the end of the project's life time, the cash flow is $-10000. The engineer who's evaluating this project disaggregate the cash flow by breaking it down to an annuity starting from year 0 to 10 with A = $10000 and the rest as a uniform gradient cash flow. The engineer analyzes the present worth of the project as P=A(P/A,i,a)(F/P,i,b)-G(P/G,i,c)(F/P,i,d). What should be the values for a, b, c, d, and G?
Business
1 answer:
givi [52]3 years ago
6 0

Answer:

a=b=c=10

G = 800

Explanation:

a,b,c show the time(number of years)

G is the amount of increase in cash flow each year.

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If the total value of goods exported from a nation is less than the total value of goods imported to the nation, the nation is e
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8 0
2 years ago
If small samples can reveal something that large samples might not, why not just take small samples in every situation?
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8 0
3 years ago
DYI Construction Co. is considering a new inventory system that will cost $750,000. The system is expected to generate positive
Oksanka [162]

Answer:

Year Cashflow        [email protected]% PV

$                      $

0 (750,000)             1          (750,000)

1        350,000               0.9259    324,065

2       325,000               0.8573     278,623

3        250,000              0.7938      198.450

4        180,000               0.7350      132,300

                                        NPV         184,438

The correct answer is D. The difference in answers is due to rounding error.

Explanation:

Net present value is the diffrence between initial outlay and present value of inflow. We need to discount the cash inflows for year 1 to year 4 at 8% and then calculate the present value of cash inflows by multiplying the cash inflows by the discount factors. Finally, we will calculate NPV by deducting the initial outlay from the present value of cash inflows.

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