A) Let's use a project with a five-year lifespan and the following cash flow as an example.

If the applicable discount

YEAR CASH FLOWS DISCOUNT RATE
1 5000 16% 4310.34482758621
2 7000 5202.14030915577
3 9000 5765.91906187216
4 12000 6627.4931745657
5 16000 7617.80824662724
B) Assume Mr. X deposits Rs. 500, Rs. 1000, Rs. 1500, Rs. 2000, and Rs. 2500 into his savings account each year.
The annual interest rate is 5%. He is interested in learning the estimated worth of his deposits at the conclusion
ANSWER YEAR CASH FLOWS INTEREST RATE FV
1 500 5% ₹ 607.75
3 1000 ₹ 1,102.50
3 1500 ₹ 1,653.75
4 2000 ₹ 2,100.00
5 2500 ₹ 2,500.00

C) A significant investment bank has offered Mr. Mohammad Ali a position as an accountant. His base pay will rem
Answer PV ₹ 238,380.26

D) The first of 15 payments, each worth Rs. 1,000, will be made today under an annuity. If the interest rate is 9% in
Answer ₹ 29,360.92

E) Let's say you have a perpetual bond with a $500 annual payment guarantee. You think a 6% return is appropria
Answer PVP 8333.333

F) Determine the present value of a rising annuity using the supplied data: Annual cashflows are 67,000; the need
Answer YEAR CASH FLOWS
1 67000
2 69010
3 71080.3
4 73212.709
5 75409.09027
6 77671.3629781
7 80001.503867443
8 82401.5489834663
9 84873.5954529703
10 87419.8033165594
11 90042.3974160562
12 92743.6693385379
13 95525.979418694
14 98391.7588012548
15 101343.511565292
16 104383.816912251
17 107515.331419619
18 110740.791362207
19 114063.015103074
20 117484.905556166
 G) A private investor who has ABC firm preferred stock. The company plans to pay out $

Preferred Dividend per share 20

Total No of Shares 200
Total Value of Dividends 4000
Cash Flow 4000
Cash Flow 1 4080
Interest Rate 0.08
Growth Rate 0.02
Present value of perpetuity 68000
ple. If the applicable discount rate is 16%, calculate the present value of each cash flow.

savings account each year.

his deposits at the conclusion of the fifth year.

ountant. His base pay will remain at 35,000 until his retirement. One year after his first day of employment, he will be paid his first annu

ty. If the interest rate is 9% in 15  years, what would this be worth then?

hink a 6% return is appropriate for this perpetual bond since you think the borrower is creditworthy. We may calculate the present val

shflows are 67,000; the needed rate of return is 8%; the cash flow growth rate is 3%; and the time horizon is 20 years.
INTIAL INVESTMENT 67000
INTEREST RATE 8%
GROWTH RATE 3%
TIME PERIOD 20

PRESENT VALUE OF GROWING ANNUITY ₹ 820,752.78

e company plans to pay out $20 per share in preferred dividends for all of time. For the investor, an 8 percent rate of return is necessa
ment, he will be paid his first annual salary.  15 years of employment are anticipated for Mr. Ali. If the discount rate is 12 percent, what

We may calculate the present value of this perpetuity using this information.

izon is 20 years.
percent rate of return is necessary. Cash flows increase on a proportionate basis of 2%. 200 shares of ABC are currently held by the inv
nt rate is 12 percent, what is the offer's present value?
re currently held by the investor. Assist the investor in deciding. As shown below, calculate the entire value of dividend income.
of dividend income.