Self-Study Questions
Questions 1 through 10 relate to the following cash-flow diagram.
| 1. | What is the PW(7%) of the given cash-flow stream? |
| 2. | What is the FW(7%) (at the end of period 8) of the given cash-flow stream? |
| 3. | Show that the PW(7%) and the FW(7%) of the given cash-flow stream are equivalent. |
| 4. | What is the AE(7%) of the given cash-flow stream? |
| 5. | Show that the PW(7%) and the AE(7%) of the given cash-flow stream are equivalent. |
| 6. | Calculate the PW(i) of the given cash-flow stream for i = 0%, 2%, 4%, 6%, 8%, and 10%. You may plot the results as a graph similar to Figure 8.2 if you want. What do these PW(i)'s tell you about the IRR for the cash-flow ... |
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