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NEW QUESTION: 1
What is the present value today of these annual cash flows: <$10,000>, $5,000, $4,000, $3,000, $2,000?
Assume the first cash flow occurs today and an interest rate of 8% per year, compounded annually. (Note that the <> are used to indicate a negative number).
A. $2,110.45
B. $4,000.00
C. $2,380.01
D. $2,045.10
E. $1,910.54
Answer: E
Explanation:
Explanation/Reference:
Explanation:
You could solve this question using several different compound interest problems, but it is easier to solve them using the calculator's cash flow functions. On the BAII Plus, press CF 2nd CLRWork 10000 +/- ENTER DownArrow 5000 ENTER DownArrow DownArrow 4000 ENTER DownArrow DownArrow 3000 ENTER DownArrow DownArrow 2000 ENTER DownArrow DownArrow 2nd Quit. Then press NPV 8 ENTER DownArrow CPT. On the HP12C, press these keys: 10000 CHS BlueShift CFo 5000 BlueShift CFj
4000 BlueShift CFj 3000 BlueShift CFj 2000 BlueShift CFj. Then press 8 i, YellowShift NPV. The
"DownArrow" represents the downward-pointing arrow on the top row of the BAII Plus keyboard.

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