A project has the following cash flow. Year zero's cash flow is -$40,000. The following years'...
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A project has the following cash flow. Year zero's cash flow is -$40,000. The following years' cash flows increase by $8,000 each year. At the end of the project's life time, the cash flow is $40,000. The engineer who's evaluating this project disaggregate the cash flow by breaking it down to an annuity starting from year 0 to 10 with A = -$40,000 and the rest as a uniform gradient cash flow. The engineer analyzes the present worth of the project as P=A(P/A,i,a)(F/P,i,1)+G(P/G,i,b) (F/P,i,c). What should be the values for a, b, c, and G? 5 6 [[|]] 7 8 9 10 A project has the following cash flow. Year zero's cash flow is -$40,000. The following years' cash flows increase by $8,000 each year. At the end of the project's life time, the cash flow is $40,000. The engineer who's evaluating this project disaggregate the cash flow by breaking it down to an annuity starting from year 0 to 10 with A = -$40,000 and the rest as a uniform gradient cash flow. The engineer analyzes the present worth of the project as P=A(P/A,i,a)(F/P,i,1)+G(P/G,i,b) (F/P,i,c). What should be the values for a, b, c, and G? 5 6 [[|]] 7 8 9 10
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To find the values for a b c and G in the given equation we need to analyze the cash flow pattern an... View the full answer
Related Book For
Financial Management Theory and Practice
ISBN: 978-1305632295
15th edition
Authors: Eugene F. Brigham, Michael C. Ehrhardt
Posted Date:
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