2.11 Heddy is considering working on a project that will cost her $20 000 today. It will pay her $10 000 at the end of each of the next 12 months and cost her another $15 000 at the end of each quarter. An extra $10 000 will be received at the end of the project, one year from now. Illustrate these cash flows in two cash flow diagrams. The first should show each cash flow element separately, and the second should show only the net cash flow in each period.

2.11 Heddy is considering working on a project that will cost her $20 000 today. It will pay her $10 000 at the end of each of the next 12 months and cost her another $15 000 at the end of each quarter. An extra $10 000 will be received at the end of the project, one year from now. Illustrate these cash flows in two cash flow diagrams. The first should show each cash flow element separately, and the second should show only the net cash flow in each period.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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How much money should be deposited each year for 6 years starting 1 year from today, if you wish to withdraw $5132 each year for 13 years, beginning at the end of 13 years? Let i=12% per year.Create a cash flow diagram
Solve the following question with complete solution and include cash flow diagram in handwritten form:How much money should be deposited each year for 5 years starting 1 year from today, if you wish to withdraw $9889 each year for 9 years, beginning at the end of 16 years? Let i=12% per year. (Round off to 2 decimal places)
Suppose that P400 is deposited each year into a bank account that pays 8% interest annually. If 12 payments are made into the account, how much would be accumulated in his fund by the end of the 12th year? The first payment occurs at time zero (now). Draw a cash flow diagram too.
The cash-flow diagram is provided a. If P = $1,000, A = $200, and % = 15% per year, then N= ? b. If P=$1,000, A= $200, and N=8 years, then i =? c. If A = $200, 1% = 15% per year, and N=4 years, then P=? d. If P= $1,000, /% = 15% per year, and N=4 years, then A= ? Consider the accompanying cash-flow diagram Click the icon to view the interest and annuity table for discrete compounding when /= 15% per year a. The number of years equals years (Round up to the nearest whole number). b. The interest rate equals % (Round to two decimal places) c. The present equivalent amount (P) equals S d. The annual payment amount (A) equals $ (Round to the nearest cent) (Round to the nearest cent)
You are offered an asset that costs $150,000 and has cash flows of $1,350 at the end of every month for the next 6years. Assume the cost of capital is 9percent per year.a. What is the IRR of the asset?b. What is the NPV of the asset? c. If your cost of capital is 12percent, should you purchase it? (Setup cash flows in Excel spreadsheets and uses the following Excel Financial functions, IRR, and NPV to derive your answers.
You have been offered the opportunity to invest in a project that will pay$3,509per year at the end of years one through three and$6,911per year at the end of years four and five. These cash flows will be placed in a saving account that pays11.95percent per year. What is the future value of this cash flow pattern at the end of year five? Round the answer to two decimal places. Your Answer:
Depict the following transactions on a certain cash flow diagram: Depositing $4,000 today and withdrawing $2,000 after two years. • The rest of the money is withdrawn after 4 years. • If the interest rate is 10%, how much money will be available for the last withdrawal? • How long would it take for $200 to double if the interest rate is 12%?
Using Microsoft Excel, create an investment cash-flow diagram that will have a present worth of zero using MARR = 14.5%. The study period needs to be exactly 8 years and each year should have at least one unique cash flow that is different from the cash flows over the other years. Your answer should contain a table showing the cash flows for each year and a graphical representation of the cash flows (cash-flow diagram).
Using Microsoft Excel, create an investment cash-flow diagram that will have a present worth ofzero using MARR = 14.5%. The study period needs to be exactly 8 years and each year shouldhave at least one unique cash flow that is different from the cash flows over the other years. Youranswer should contain a table showing the cash flows for each year and a graphical representationof the cash flows (cash-flow diagram)
A process engineer plans on investing $5,000.00 now so that they may withdraw $500.00 a year for 12 years and still have $1,000.00 left in the account at the end of 12 years. a) Sketch the Cash Flow diagram. b) Write the equation for Present Worth of the cash flows in terms of the unknown rate of return. c) Calculate the rate of return on this investment using net present worth analysis techniques. (Hint: use linear interpolation).
How much money should be deposited each year for 12 years if you wish to withdraw $309 each year for five years, beginning at the end of the 14th year? Let i=8% per year. Illustrate your solution using Cash Flow Diagrams .
DIRECTIONS: Solve the following problems neatly and legibly. Draw the necessary cash flow diagrams. Box your final answer. PROBLEM 1: Determine the present worth of an annual payment of P 4500.00 : 1. If made at the beginning of the year for 12 years at 8% compounded annually.2. If made at the end of each month for 5 years at 4% compounded monthly.3. If 15 payments start at the end of year 4 at 6% compounded annually

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