Value of mixed streams Find the present value of the streams of cash flows shown in the following table, Assume that the firm's opportunity cost is 14%. a. The present value of stream A is $ b. The present value of stream B is $ (Round to the nearest dollar.) c. The present value of stream C is $ (Round to the nearest dollar.) (Round to the nearest dollar.) Data table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) A B C Year 1 Cash Flow -$2,000 Year Cash Flow Year Cash Flow 1 $10,000 1-5 $12,000/yr 2 $3,000 2-5 $5,200/yr 6-10 $7,900/yr 3 $3,900 6 $7,200 4 $6,100 5 $8,000 Print Done
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- In the accompanying diagram, what is the value of K on the left-hand cash-flow diagram that is equivalent to the right-hand cash-flow diagram? Let i = 12%.Consider the cash flow transactions depicted in the accompanying cash flow diagram, if the value of B=$1200, the present value P is closest to:Consider two assets with the following cash flow streams:Asset A generates $4 at t=1, $3 at t=2, and $10at t=3. Asset B generates $2 at t=1, $X at t=2, and $10at t=3.Suppose X=6 and the interest rate r is constant. (a)For r=0.1, calculate the present value of the two assets. (b)Determine the set of all interest rates {r} such that asset A is more valuable than asset B. (c)Draw the present value of the assets as a function of the interest rate. (d)Suppose r=0.2.Find the value X such that the present value of asset B is 12. (e)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.
- Consider the calculation of an external rate of return (ERR). The positive cash flows in the cash flow profile are moved forward to t = n using what value of i in the (F|P,i,n–t) factors? a. 0 b. The unknown value of ERR (i′) c. MARR d. IRR.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.)What is the internal rate of return of the following cash flow diagram? a. 20.0% b. 18.2% c. 17.5% d. 15.0%.
- Select all the correct statements. The internal rate of return (IRR) generated by a positive cash flow stream of n payments a. is always given by the solution of a quadratic equation b. is always bigger or equal than -1 c. can be -2 for a suitable cashflow d. can be 17 for a suitable cashflow e. is always smaller or equal than +1Consider 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. 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.)Consider the cash flow transactions depicted in the accompanying cash flow diagram, with the changing interest rates specified, and i=10% the value of F is closest to
- In a cash flow series regarding the gradient: Select one: a. Uniform gradient signifies that an income or disbursement changes by the same amount in each interest period b. Either an increase or decrease in the amount of a cash flow is called the gradient с. The gradient in the cash flow may be positive or negative o d. All of the above is correctTick all those statements that are correct. The internal rate of return (IRR) generated by a positive cash flow stream of n payments □ a. is always given by the solution of a quadratic equation O b. can be -2 for a suitable cashflow can be 17 for a suitable cashflow is always bigger or equal than-1 C. O d. 0 e. is always smaller or equal than +1Which of the following statements are correct? The internal rate of return (IRR) generated by a positive cash flow stream of n payments. (a)is always smaller or equal than +1 (b)is always given by the solution of a quadratic equation (c)is always bigger or equal than -1 (d)can be 17 for a suitable cashflow (e)can be -2 for a suitable cashflow