1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Reil [10]
2 years ago
12

he appropriate discount rate for the following cash flows is 8 percent compounded quarterly. Year Cash Flow 1 $700 2 700 3 0 4 1

,100 What is the present value of the cash flows
Business
1 answer:
rewona [7]2 years ago
4 0

Answer:

Thus, the present value is $2045.52.

Explanation:

Use the below formula to find the present value:

Present value = FV ÷ (1 + r/4)^(n*4)

Present value :

=\frac{700}{(1 + \frac{0.08}{4} )^{1 \times 4} } + \frac{700}{(1 + \frac{0.08}{4} )^{2 \times 4} } + \frac{0}{(1 + \frac{0.08}{4} )^{3 \times 4} } +\frac{1100}{(1 + \frac{0.08}{4} )^{4 \times 4} } \\ \\= \frac{700}{1.0824}+\frac{700}{1.1716} +0+\frac{1100}{1.3727} \\= 2045.52

Thus, the present value is $2045.52.

You might be interested in
What is the difference in accounting treatment of unrealized gains and losses across these three categories of investments
hammer [34]

Answer:

Unrealized gains and losses treatment:

Available for sale - recorded in OCI

Held till maturity - not recognized in financial statements until maturity

Held for Trading - Fair value through profit and loss

Explanation:

There are three categories of financial instruments. Available for Sale AFS, Held for trading HFT and Held till maturity HTM. Financial instruments are classified in these categories and then treatments is according to their classification. IAS 39 and IFRS 9 have provided complete guidelines for the treatment of the financial securities.

6 0
2 years ago
Last year, Kurt invested $1,000 in ABC stock, $1,000 in long-term government bonds, and $1,000 in U.S. Treasury bills. Over the
marin [14]

Answer:

6%

Explanation:

3 0
3 years ago
Equity financing (or funding) means ________.
Zanzabum

Answer:

A) exchanging partial ownership in a firm

Explanation:

Equity is the basic source of fund for any corporation, it the most initial phase in which equity is issued in exchange of a share of ownership in the company. For this the equity holder pays money to the company.

In this manner there is an ownership distributed for the share of money needed by the company.

This does not involve any statutory return payment on behalf of company in later future. As against it in case of loan, it needs to be repaid.

Equity form of funds do not demand any repayment.

7 0
2 years ago
You just invested $1000 in an account that returns 5% per year. After 50 years, when you are old and gray, what will be the valu
nikitadnepr [17]
Jahsjsjshsnsjdjjshsnananaa
3 0
2 years ago
Read 2 more answers
How long will it take for the dollar's purchasing power to be 3/4ths of what it is now, if the general inflation rate is expecte
vaieri [72.5K]

Answer:

5.61 years

Explanation:

Let the Present value be 'x'

Data provided in the question:

Future value = \frac{3}{4}x

Inflation rate, i = 5% = 0.05

Now,

Using the compounding

let number of years be n

thus,

Future value = Present value × [ 1 - inflation rate ]ⁿ

\frac{3}{4}x = x × (1  - 0.05)ⁿ

or

0.75 = 0.95ⁿ

on taking log on both the sides , we get

or

log(0.75) = n × log(0.95)

or

-0.125 = n × (-0.0223)

or

n = 5.61 years

or, n = 11.89 years

8 0
3 years ago
Other questions:
  • Use the following advice from most financial advisors to solve the problem. ∙ Spend no more than 28% of your gross monthly incom
    11·1 answer
  • Why can a bank afford to pay interest rate on a savings account
    6·2 answers
  • Beginning with the first pay of the year, Carson will make $2,700 each week. In which numbered pay of the year will Carson hit t
    7·1 answer
  • Use this tax table to find how much tax you need to pay on a taxable income of $40,000.
    11·1 answer
  • Planning goals is a large part of self management t or f
    8·1 answer
  • Water carriers played a dominant role in the transportation system of the United States in the 18th and 19th centuries. Why has
    8·1 answer
  • Imagine that an economic recession erodes consumer confidence. As a result, the marginal propensity to consume drops from .8 to
    11·1 answer
  • When you state a business rule that pertains to your​ organization, such as​ "at my​ university, a student may declare only one
    11·1 answer
  • A small apartment property is estimated to have potential gross income of $ 25,000. Vacancy and collection losses are expected t
    13·1 answer
  • Gary and Diane must prepare a presentation for their marketing class. As part of their presentation, they must do a series of ca
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!