Consider the following cash flows and interest rates: 0 r = 2.5% 1 r = 1.5%...

 

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Consider the following cash flows and interest rates: 0 r = 2.5% 1 r = 1.5% 5,000 2 r = 1.9% 5,000 3 r = 2.4% 5,000 4 5,000 a. Calculate the present value of these cash flows (at time 0). (5 marks) b. Calculate the future value of these cash flows (at time 4). (5 marks) Consider the following cash flows and interest rates: 0 r = 2.5% 1 r = 1.5% 5,000 2 r = 1.9% 5,000 3 r = 2.4% 5,000 4 5,000 a. Calculate the present value of these cash flows (at time 0). (5 marks) b. Calculate the future value of these cash flows (at time 4). (5 marks)

Answer rating: 100% (QA)

ANSWER A present value of year 1 cash flows 5000 1 25 4878 Present value of year 2 cash flows 5000 ... View the full answer