Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Transcribed Image Text:1. Determine values for present worth (PW or NPV), future worth (FW), annual worth (AW) AND
discounted payback (DPBP) for the following cash flow system.
Consider two interest rate scenarios in your evaluations:
a. 4% per year, compounded annually
b. 12% per year, compounded annually.
End of Year
Cash Flow
2
3
4
5
6
0
1
-$40,000 $8,200 $8,200 $8,200 $8,200 $8,200 $8,200
7
$8,200
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