The unknown value of A from the cash flows in table below is _________________. i= 6% per year Year 0 1 2 3 4 5 Cash Flow -$5,000 4A 3A 2A A 5A Select one: a. $395.21 b. $274.80 c. $349.97 d. $434.63 For the cash flows provided in the table below, determine the unknown value “A”. Use an interest rate of 7%. Year 0 1 2 3 4 5 Cash flow 12,000 -A -2A -3A -4A -6A Select one: a. $973.60 b. $ 846.04 c. $791.80 d. $654.56 Given the cash flows in table below, determine the rate of return. Year 0 1 2 3 4 Cash Flow $10K $0 $5K $0 $10K Select one: a. 100% b. 11.2% c. Cannot determine d. 8.91% Year 0 1 2 3 4 5 Cash Flow -$5,000 4A 3A 2A A 5A Solution 1. Correct Answer: Explanation: Here interest rate in question is the IRR. At I = 6% And A = 395.21 (taken from the answer choice) Present value of cash inflows = CF1/1.06 + CF2/1.06^2 + CF3/1.06^3 + CF4/1.06^4 + CF4/1.06^5 Present value of cash inflows = 1580.84/1.06 + 1185.63/1.06^2 + 790.42/1.06^3 + 395.21/1.06^4 + 1976.05/1.06^5 Present value of cash inflows = $4999.88 or $5000 approx. 2. 2. Correct Answer: Explanation: At this amount only , NPV is negative PV of negative cash flows = -(CF1/1.07 + CF2/1.07^2 + CF3/1.07^3 + CF4/1.07^4 + CF5/1.07^5) At A = 973.60 PV of negative cash flows = - (973.6/1.07 + 1947.2/1.07^2 + 2920.8/1.07^3 + 3894.4/1.07^4 + 5841.6/1.07^5) = -12130.91 NPV =12000 – 12130.91 = -130.91 At other values NPV will be positive. Note: Pl. repost other unanswered questions to get their proper answers..

1. The "up - and - down" component of a time series that represents periods of prosperity followed
by recession over extended periods of time longer than one year is called
trend variation.
seasonal variation.
cyclical variation.
irregular variation.
Solution
cyclical variation.