Question: The table below summarizes the net cash flow associated with the development and sale of a new product. The interest rate is 20% per year,
The table below summarizes the net cash flow associated with the development and sale of a new product. The interest rate is 20% per year, compounded quarterly.
| Year | 1 | 2 | 3 | 4 |
| Cash Flow, $ | -100,000 | 200,000 | -25,000 | 100,000 |
- Draw the cash flow diagram.
- Identify the following 5 parameters: r, t, CP, PP, m
- Formulate the solution for the equivalent future worth at the end of the fourth year.
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