Chapter 2 Homework id container Iti&context id-101767907&custom assig I L httpse

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Chapter 2 Homework id container Iti&context id-101767907&custom assig I L httpse newconnect.m education .com/flow connect html7comum nment id- 204741007&custom correlatior Thank You- EduBird An Arithmetic Cash Flow Gradient Series Equals $60 Che Chapter 2 Chapter 2 Homework Saved Help Save&Exit Submit 7 An arithmetic 8. At i: 7% per year, determine the present worth of the cash flow series in year 0. cash flow gradient series equals $400 in year 1, $500 in year 2, and amounts increasing by $100 per year through year 10 points The present worth of the cash flow series in year O is $ Skipped eBook Hint Print Refecences K Prev 7 of 12 Next >

Explanation / Answer

Applying the Present Value of Annuity formula,

400/(1+7%)+500/(1+7%)2+600/(1+7%)3+700/(1+7%)4+800/(1+7%)5+900/(1+7%)6+1000/(1+7%)7

+1000/(1+7%)8= 4267.41, which is the present value of cash flow in year 0

Year Cash Flow 1 400 2 500 3 600 4 700 5 800 6 900 7 1000 8 1100

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