Assignment: Present and Future Value
Now consider an irregular cash flow stream (where CFs can take on any value).
Question 1: Calculate the Present Value of the Uneven Cash Flows. Interest Rate = 10%
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T=0
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T=1
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T=2
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T=3
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T=4
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T=5
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$0
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$100
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$300
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$300
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$300
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$500
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Question 2: Calculate the Future Value of the Uneven Cash Flows.Interest Rate = 12%
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T=0
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T=1
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T=2
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T=3
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T=4
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T=5
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$0
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$100
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$300
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$300
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$300
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$500
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Question 3: Assume that an investment with the following positive cash flows has a cost of $957.90 (outflow). Find the rate of return on this investment.
Question 4: How many years does it take for an investment to double if the interest rate is 1.25%?