A project anticipates net cash flows of $10,000 at the end of year one, with such amount growing at the expected 5 percent rate of inflation over the subsequent four years. Calculate the real present value of this five-year cash stream if the firm employs a nominal discount rate of 15 percent.
A) $43,294
B) $55,000
C) $38,377
D) $33,522
Ans: C) $38,377
Business
You might also like to view...
Which of the following is a set price or price range in consumers' minds that they refer to in evaluating a product's price?
A) dynamic price B) internal reference price C) suggested retail price D) captive price E) value price
Business
Convert the following linear program into a simplex model form:
Maximize 8X + 10Y Subject to: 5X + 3Y ? 34 2X + 3Y = 22 X ? 3 X, Y ? 0
Business