The formula for present value of a future cash flow is OPV FV (1 + D^N O PV=FV+ (1 + 1)^N O PV [FV/ (1 + I)]^N O PV - FV x (1 + 1)^N PV FV / (1 + 1)^N

For one lump sum FV, the PV of your future liquidity decreases a. as FV increases.b. as t decreases. c. as r increases. d. as r decreases. e. unpredictably.

Assume that the variables I, N, and PV represent the interest rate, investment or deposit period, and present value of the amount deposited or invested, respectively. Which equation best represents the calculation of a future value (FV) using: Compound interest? O FV = PV / (1+1)N O FV = PV + (PV XIX N) O FV = PV x (1 + I)N Simple interest? OFV = PV + (PV XIX N) O FV = PV XIX N O FV = PV/(PV XIX N)

A. Assume that the variables I, N, and PV represent the interest rate, investment or deposit period, and present value of the amount deposited or invested, respectively. Which equation best represents the calculation of a future value (FV) using: Compound interest?   FV = (1 + I)NN / PV   FV = PV / (1 + I)NN   FV = PV x (1 + I)NN     B. Simple interest?   FV = PV + (PV x I x N)   FV = PV - (PV x I x N)   FV = PV / (PV x I x N)     C. Identify whether the following statements about the simple and compound interest methods are true or false. Statement True False After the end of the second year and all other factors remaining equal, a future value based on compound interest will never exceed the future value based on simple interest.       All other variables held constant, investments paying simple interest have to pay significantly higher interest rates to earn the same amount of interest as an account earning compound…

#7 For context NPV is net present value, IRR is internal rate of return, and ARR is accounting rate of return 3 c Known Amt. ? ? Known Amt. ? Known Amounts What is this chart? What is this chart? What is this chart? What is this chart? ? Known Amounts Describe Compound Interest. What do we mean when we say "discounting"? What are the reasons for using the PVA table? How do NPV and IRR differ from Payback Period and ARR?

use the given formula-

Which of the following discounts future cash flows to their present value at the expected rate of return, and compares that to the Initial Investment? A. internal rate of return (IRR) method B. net present value (N PV) C. discounted cash flow model D. future value method

Hydro Ottawa has two options for upgrading a natural gas power station to meet new government standards. Option 1: Hydro Ottawa will make the upgrades themselves. This is expected to cost $12,700 at the end of each month for 12 years. At the end of the operation (in 12 years) Hydro Ottawa expects to sell all equipment needed for the upgrade for $122,000. Option 2: Pay experienced contractors. This will cost $28,000 up front and $13,900 monthly (at the end of every month) for 15 years. Assume all interest is 3.72% compounded monthly. Round the answers to NPV (Option 1), and NPV (Option 2) to the nearest dollar. Round all other answers to two decimal places where applicable. 1) Find the net present value of option 1: P/Y = C/Y = N = I/Y = PV = PMT= FV = Payments (Cost) GA % Sale of equipment (Residual) GA GA LA %

Consider two assets with the following cash flow streams:   Asset A generates $4 at t=1, $3 at t=2, and $10 at t=3. Asset B generates $2 at t=1, $X at t=2, and $10 at t=3.   Suppose X=6 and the interest rate r is constant.   For r=0.1, calculate the present value of the two assets. Determine the set of all interest rates {r} such that asset A is more valuable than asset Draw the present value of the assets as a function of the interest rate. Suppose r=0.2. Find the value X such that the present value of asset B is 12. Suppose the (one-period) interest rates are variable and given as follows: r01=0.1,r12=0.2, r23=0.3. Calculate the yield to maturity of asset A. (You can use Excel or ascientific calculator to find the solution numerically.)

State the decision criteria for each of the following. (2)   PI >   MIRR >   NPV >   IRR >   options;  0 1 PI MIRR NPV IRR Payback