2. You expect to deposit the following cash flows at the end of years 1 through 5, ($1,000; $4,000; $9,000; $5,000; and $2,000) respectively. Alternatively, you could deposit a single amount today at the beginning of year 1 (end of year 0). How large does the single deposit need to be today if you can earn 10% compounded annually? Hint: the present value today (t-0) is identical to the single cash flow amount. a) $15,633.62 b) $21,000.00 c) $25,178.10 d) $27,695.91
2. You expect to deposit the following cash flows at the end of years 1 through 5, ($1,000; $4,000; $9,000; $5,000; and $2,000) respectively. Alternatively, you could deposit a single amount today at the beginning of year 1 (end of year 0). How large does the single deposit need to be today if you can earn 10% compounded annually? Hint: the present value today (t-0) is identical to the single cash flow amount. a) $15,633.62 b) $21,000.00 c) $25,178.10 d) $27,695.91
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 8EA: You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how...
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