Determine the expected present worth of the following cash flow series if each series may be realized with the probability shown at the head of each column. Let i = 20% per year. The present worth when the probability is 0.4 is $________ . The present worth when the probability is 0.23 is $________ . The present worth when the probability is 0.37 is $_________ . The expected present worth value is $______________ .

Determine the expected present worth of the following cash flow series if each series may be realized with the probability shown at the head of each column. Let i = 20% per year. The present worth when the probability is 0.4 is $____ . The present worth when the probability is 0.23 is $ . The present worth when the probability is 0.37 is $_ . The expected present worth value is $__________ .

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter15: Capital Investment Analysis

Section: Chapter Questions

Problem 3SEQ: The expected period of time that will elapse between the date of a capital investment and...

See similar textbooks

Required information

Cash flow series

	Annual Cash Flow ($ per year)	Annual Cash Flow ($ per year)	Annual Cash Flow ($ per year)
Year	Prob = 0.4	Prob = 0.23	Prob = 0.37
0	–5000	–6000	–4000
1	1000	500	3500
2	1000	1500	1200
3	1000	2000	100

Determine the expected present worth of the following cash flow series if each series may be realized with the probability shown at the head of each column. Let i = 20% per year.

The present worth when the probability is 0.4 is $________ .

The present worth when the probability is 0.23 is $________ .

The present worth when the probability is 0.37 is $_________ .

The expected present worth value is $______________ .

Video Video

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Introduction

VIEW

Calculation

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Determine the ERR (External rate of return) of the cash flows if external rate (e) is given as %10. Cash Flow Year 0 1 2 3 4 5 6 7 Select one: a.0.245007 b.0.19667 c.0.168017 d.0.204146 e.0.274516 f.0.181262 g.0.228861 h.0.264278 -3000 3000 6000 -1000 2000 4000 -5000 8000
Find the present worth of the following infinite cash flow using I = 8% year
What is the present value of the following cash flow stream at a rate of 6.25%? YEAR O=0 YEAR 1= P75 YEAR 2= P225 YEAR 3=PO YEAR 4=P300 * 411.57 433.23 456.03 480.03 505.30
Compute the IRR from the following set of cash flows: Year Cash Flow 0 (1000) 1 400 2 400 3 400 4 600 Question 10 options: 15.2 21.9 26.4 33.9
Single Cash Flow Future Value Inputs Single Cash Flow Discount Rate/Period 747.25 6.00% Number of Periods Future Value using a Time Line Period 2 3 4 Cash Flows Future Value of Each Cash Flow Future Value Future Value using the Formula Future Value Future Value using the FV Function Future Value
Determine the ERR (External rate of return) of the cash flows if external rate (e) is given as %19. Year Cash Flow 0 -3000 1 2000 2 4000 3 -1000 4 3000 5 4000 6 -5000 7 9000 Select one: a. 0.2988 b. 0.2638 c. 0.2565 d. 0.3073 e. 0.2783 f. 0.3491
For the cash flows shown, determine: (a) the number of possible i* values (b) the i* value displayed by the IRR function (c) the external rate of return using the MIRR method if ii = 18% per year and ib = 10% per year. Year 0 1 2 3 4 Revenues, $ 0 25,000 19,000 4000 18,000 Costs, $ −6000 −30,000 −7000 −6000 −12,000
Apply the ERR method with ∈=12% per year to the following series of cash flows. Is there a single, unique IRR for these cash flows? What is the maximum number of IRRs suggested by Nordstrom’s criterion?
What is the profitability index of an investment with cash flows in years 0 thru 2 of -11000 , 8000 and 8100 respectively, and a discount rate of 6 percent?
Find the present worth in year 0 for the cash flows shown. Let i = 10% per year. Please solve it with formula not table, Thank you
An arithmetic cash flow gradient series equals $600 in year 1, $800 in year 2, and amounts increasing by $200 per year through year 5. At i = 6% per year, determine the factor from the compound interest factor table that is used to calculate the equivalent annual worth of the revenue through year 5. Multiple choice question. A. 4.212 B. 5.637 C. 1.884 D. 7.934
Consider the following cash flow profile: Using a gradient series factor, determine the present worth equivalent for the cash flow series using an annual compound interest rate of: a. 6% b. 7%.