Time Value of Money: Single Cash Flow

Jan 20th, 2015
SoccerBoss
Category:
Business & Finance
Price: $10 USD

Question description

Questions

In a Word document, respond to the following. Number your responses 1–3.

  1. Explain the concept of cash flow in corporate finance.
  2. Explain how present value and future values are related.
  3. Explain how present values are affected by changes in interest rates.

Use references to support your responses as needed. Be sure to cite all references using correct APA style. Your responses should be free of grammar and spelling errors, demonstrating strong written communication skills.

Problems

In either a Word document or Excel spreadsheet, complete the following problems.

  • You may solve the problems algebraically, or you may use a financial calculator or an Excel spreadsheet.
  • If you choose to solve the problems algebraically, be sure to show your computations.
  • If you use a financial calculator, show your input values.
  • If you use an Excel spreadsheet, show your input values and formulas.

In addition to your solution to each computational problem, you must show the supporting work leading to your solution to receive credit for your answer.

Unless otherwise directed, assume annual compounding periods in the computational problems.

  1. If you deposited $250 in your savings account today, and the bank pays 4 percent interest per year, how much would you have in your savings account after 9 years?
    • Recalculate the account balance using a 6 percent interest rate and a 7 percent interest rate.
  2. A $450 deposit earns 6 percent interest in the first year, 3 percent interest in the second year, and 7 percent interest in the third year. What is the future value at the end of the third year?
  3. What is the annual rate of return for an $8,000 investment if in five years it grows to $12,500?
    • Assuming the growth occurred in six years and then eight years, recalculate the rate of return for these two scenarios.

Tutor Answer

(Top Tutor) Daniel C.
(997)
School: UCLA
PREMIUM TUTOR

Studypool has helped 1,244,100 students

8 Reviews


Summary
Quality
Communication
On Time
Value
tinytim47
Nov 29th, 2016
" Wow this is really good.... didn't expect it. Sweet!!!! "
Five Star Tutor
Nov 20th, 2016
" Outstanding Job!!!! "
mixedballz
Nov 15th, 2016
" excellent work as always thanks for the help "
lilmoe415
Nov 6th, 2016
" Thank you, Thank you, for top quality work, this is your guy!! "
darnay
Oct 24th, 2016
" The best tutor out there!!!! "
dontuwannaknow
Oct 15th, 2016
" Excellent work as always thanks so much "
SjSurvivor143
Oct 1st, 2016
" Thanks for the help. "
Joemoe
Sep 18th, 2016
" <3 it, thanks for saving me time. "
Ask your homework questions. Receive quality answers!

Type your question here (or upload an image)

1830 tutors are online

Brown University





1271 Tutors

California Institute of Technology




2131 Tutors

Carnegie Mellon University




982 Tutors

Columbia University





1256 Tutors

Dartmouth University





2113 Tutors

Emory University





2279 Tutors

Harvard University





599 Tutors

Massachusetts Institute of Technology



2319 Tutors

New York University





1645 Tutors

Notre Dam University





1911 Tutors

Oklahoma University





2122 Tutors

Pennsylvania State University





932 Tutors

Princeton University





1211 Tutors

Stanford University





983 Tutors

University of California





1282 Tutors

Oxford University





123 Tutors

Yale University





2325 Tutors