Business, 28.02.2021 17:20 nyceastcoast

A series of cash flows may not always necessarily be an annuity. Cash flows can also be uneven and variable in amount, but the concept of the time value of money will continue to apply. Consider the following case: The Purple Lion Beverage Company expects the following cash flows from its manufacturing plant in Palau over the next five years:

Annual Cash Flows
Year 1 Year 2 Year 3 Year 4 Year 5
$100,000 $20,000 $480,000 $450,000 $550,000

The CFO of the company believes that an appropriate annual interest rate on this investment is 9%. What is the present value of this uneven cash flow stream, rounded to the nearest Whole dollar?

a. $1975000
b. $600,000
c. $1,775,000
d. $1,395,097

Answers: 1

Show answers

Another question on Business

Business, 22.06.2019 08:30

Conor is 21 years old and just started working after college. he has opened a retirement account that pays 2.5% interest compounded monthly. he plans on making monthly deposits of $200. how much will he have in the account when he reaches 591 years of age?

Answers: 2

Answer

Business, 23.06.2019 02:00

When the two countries did not specialize, the total production of jeans was 23 million pairs per month, and the total production of corn was 68 million bushels per month. because of specialization, the total production of jeans has increased by million pairs per month, and the total production of corn has increased by million bushels per month. because the two countries produce more jeans and more corn under specialization, each country is able to gain from trade?

Answers: 1

Answer

Business, 23.06.2019 04:31

Ndas not only outline confidential information but they also enable you to outline what information

Answers: 3

Answer

Business, 23.06.2019 06:50

How is a federal loan different from a private loan for an education? a federal loan is available for any student who meets the government's lending standards. a private loan is only available for students who show a need. a federal loan is only available for students who show a need. a private loan is available for any student who meets the bank's lending standards. a federal loan can only be used to pay for a student's tuition. a private loan can be used to pay for a student's tuition and any other expenses. a federal loan can be used to pay for a student's tuition and any other expenses. a private loan can only be used to pay for a student's tuition.

Answers: 1

Answer

You know the right answer?

A series of cash flows may not always necessarily be an annuity. Cash flows can also be uneven and v...

Questions