Discount rate: 6% End of year: 1. 3. 4 Cash flows: (20,000) $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 What is the Net Present Value of the cash flows? 7 At what discount rate is the Net Present Value "0"? Initial outlay: 2$ 5,000 Life of investment in years: 10 Amount to be received at end: 2$ 10,000 8. Rate of return: Amount of loan: 50,000 Annual payment: 2$ 10,000 Interest rate: 8% 9. How many years will it take to pay off the loan?
Discount rate: 6% End of year: 1. 3. 4 Cash flows: (20,000) $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 5,000 What is the Net Present Value of the cash flows? 7 At what discount rate is the Net Present Value "0"? Initial outlay: 2$ 5,000 Life of investment in years: 10 Amount to be received at end: 2$ 10,000 8. Rate of return: Amount of loan: 50,000 Annual payment: 2$ 10,000 Interest rate: 8% 9. How many years will it take to pay off the loan?
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 27P
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