Below is an example of an uneven cash flow problem. In an uneven cash flow problem the
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Below is an example of an uneven cash flow problem. In an uneven cash flow problem the cash flows occur over time, but they are not equal and they are not necessarily periodic like an annuity. These type of problems can be solved by discounting or compounding each value as appropriate and summing the result together. Spreadsheets and certain functions in a calculator can also be used to facilitate the calculation. It is expected that you can compute simple examples of uneven cash flow problems using basic TVM functions.
A business investment has the following expected cash flows:
Year Cash Flows
1 $10,000
2 $24,491
The discount rate is 7 percent. What is the investments present value?
Related Book For
International Marketing And Export Management
ISBN: 9781292016924
8th Edition
Authors: Gerald Albaum , Alexander Josiassen , Edwin Duerr
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