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What is the present value today of these annual cash flows: $1,000, $2,000, $3,000? Assume the first cash flow occurs 1 year from today and an interest rate of 10% per year, compounded annually.
A. $2,754.32.
B. $4,104.98.
C. $4,815.93.
Answer: C
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You could solve this question using 3 different compound interest problems, but it is easier to solve them using the calculator's cash flow functions.
On the BAII Plus, press CF 2nd CLRWork 0 ENTER DownArrow 1000 ENTER DownArrow DownArrow
2 000 ENTER DownArrow DownArrow 3000 ENTER DownArrow DownArrow 2nd Quit. Then press NPV
1 0 ENTER DownArrow CPT.
On the HP12C, press these keys: 0 BlueShift CFo 1000 BlueShift CFj 2000 BlueShift CFj 3000 BlueShift
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A. 0
B. 1
C. 2
D. 3
Answer: D
Explanation:
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Aalk - 2014-05-05 16:45:18
Plato - 2014-05-05 16:45:51
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Eleanore - 2014-09-28 16:36:48