Exam (elaborations)
FIN 323 CHAPTER 6 HOMEWORK PRACTICE FOR EXAM QUESTIONS AND ANSWERS WITH SOLUTIONS 2024
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FIN 323 CHAPTER 6 HOMEWORK PRACTICE FOR EXAM QUESTIONS AND ANSWERS WITH SOLUTIONS 2024
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FIN 323 CHAPTER 6 HOMEWORKPRACTICE FOR EXAM QUESTIONS AND
ANSWERS WITH SOLUTIONS 2024
HugginsRCo.RhasRidentifiedRasRinvestmentRprojectRwithRtheRfollowingRcashRflows.R
YrR1R=R800
YrR2R=R1090
YrR3R=R1350
YrR4R=R1475
IfRtheRdiscountRrateRisR7%,RwhatRisRtheRpresentRvalueRofRtheseRcashRflows?R
WhatRisRtheRpresentRvalueRatR17%?R
WhatRisRtheRpresentRvalueRatR25%?R-
RANSWERRToRsolveRthisRproblem,RweRmustRfindRtheRPVRofReachRcashRflowRandRaddRthem.RToRfindRtheRPVRofR
aRlumpRsum,RweRuse:
R
PVR=RFVR/R(1R+Rr)^t
R
PV@7%R=R$800R/R1.07R+R$1,090R/R1.07^2R+R$1,350R/R1.07^3R+R$1,475R/R1.07^4R=R$3,926.98
R
PV@17%R=R$800R/R1.17R+R$1,090R/R1.17^2R+R$1,350R/R1.17^3R+R$1,475R/R1.17^4R=R$3,110.05
R
PV@25%R=R$800R/R1.25R+R$1,090R/R1.25^2R+R$1,350R/R1.25^3R+R$1,475R/R1.25^4R=R$2,632.96
CalculatorRSolution:R
CFoR=R0
C01R=R800
, F01R=R1
C02R=R1090
F02R=R1
C03R=R1350
F03R=R1
C04R=R1475
F04R=R1
I=7
NPVRCPT
3926.98
continue
Cannonier,RInc.,RhasRidentifiedRanRinvestmentRprojectRwithRtheRfollowingRcashRflows.R
YrR1R=R1030
YrR2R=R1260
YrR3R=R1480
YrR4R=R2220
IfRtheRdiscountRrateRisR8%,RwhatRisRtheRfutureRvalueRofRtheseRcashRflowsRinRYrR2?R
WhatRisRtheRfutureRvalueRatRaRdiscountRrateRofR11%?R
WhatRisRtheRfutureRvalueRatRaRdiscountRrateRofR24%?R-
RANSWERRToRsolveRthisRproblem,RweRmustRfindRtheRFVRofReachRcashRflowRandRsum.RToRfindRtheRFVRofRaRlum
pRsum,RweRuse:
R
FVR=RPV(1R+Rr)^t
R
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