John plans to purchase a car on finance by paying 20 quarterly installments of $500. The...

 

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John plans to purchase a car on finance by paying 20 quarterly installments of $500. The first payment will occur at time zero and the annual interest rate is 8% (compounding annually). (a) Draw a cashflow diagram (1 mark) (b) What is the future worth of these cashflows? (2 marks) (c) Briefly explain the concept of equivalence and why it is important in the context of Project Appraisal. (2 marks) ► John plans to purchase a car on finance by paying 20 quarterly installments of $500. The first payment will occur at time zero and the annual interest rate is 8% (compounding annually). (a) Draw a cashflow diagram (1 mark) (b) What is the future worth of these cashflows? (2 marks) (c) Briefly explain the concept of equivalence and why it is important in the context of Project Appraisal. (2 marks) ► John plans to purchase a car on finance by paying 20 quarterly installments of $500. The first payment will occur at time zero and the annual interest rate is 8% (compounding annually). (a) Draw a cashflow diagram (1 mark) (b) What is the future worth of these cashflows? (2 marks) (c) Briefly explain the concept of equivalence and why it is important in the context of Project Appraisal. (2 marks) ► John plans to purchase a car on finance by paying 20 quarterly installments of $500. The first payment will occur at time zero and the annual interest rate is 8% (compounding annually). (a) Draw a cashflow diagram (1 mark) (b) What is the future worth of these cashflows? (2 marks) (c) Briefly explain the concept of equivalence and why it is important in the context of Project Appraisal. (2 marks) ►