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Skill-Building Problems.

1. A project requires a current investment of $117.39 and yields future expected cash flows of

$38.31, $48.53, $72.80, $96.31, and $52.18 in periods 1 through 5, respectively. All figures are in

thousands of dollars. The inflation rate is 2.7%. For these expected cash flows, the appropriate

Real Discount Rate is 8.6%. What is the net present value of this project?

2. A project requires a current investment of $328.47 and yields future expected cash flows of

$87.39, $134.97, $153.28, $174.99, and $86.41 in periods 1 through 5, respectively. All figures

are in thousands of dollars. The forecasted inflation rate starts at 3.4% in period 1 and increases to

4.7% in period 5. For these expected cash flows, the appropriate REAL discount rate starts at

7.8% in period 1 and decreases to 5.4% in period 5. What is the net present value of this project?

Live In-class Problems.

3. Given the partial Constant Discount Rate spreadsheet ReacondZ.xls, complete step 3 Discount

Rate.

4. Given the partial General Discount Rate spreadsheet ReagendZ.xls, complete step 3 Discount

Rate.

Skill-Building Problems.

1. A project requires a current investment of $117.39 and yields future expected cash flows of

$38.31, $48.53, $72.80, $96.31, and $52.18 in periods 1 through 5, respectively. All figures are in

thousands of dollars. The inflation rate is 2.7%. For these expected cash flows, the appropriate

Real Discount Rate is 8.6%. What is the net present value of this project?

2. A project requires a current investment of $328.47 and yields future expected cash flows of

$87.39, $134.97, $153.28, $174.99, and $86.41 in periods 1 through 5, respectively. All figures

are in thousands of dollars. The forecasted inflation rate starts at 3.4% in period 1 and increases to

4.7% in period 5. For these expected cash flows, the appropriate REAL discount rate starts at

7.8% in period 1 and decreases to 5.4% in period 5. What is the net present value of this project?

Live In-class Problems.

3. Given the partial Constant Discount Rate spreadsheet ReacondZ.xls, complete step 3 Discount

Rate.

4. Given the partial General Discount Rate spreadsheet ReagendZ.xls, complete step 3 Discount

Rate.