Consider another set of cash flows: What is the present value of the stream if the opportunity cost of capital is 10 percent? What is the value of the stream at the end of year 5 if the cash flows are invested in an account that pays 10 percent annually? What cash flow today (time 0), in lieu of the $2000 cash flow, would be needed to accumulate $20,000 at the end of year 5? (Assume that the cash flows for years 1 through 5 remain the same.)

Match each feature with the savings account type

Suppose farmer lane grows and sells cotton in a perfectly competitive industry. the market price of cotton is $1.64 per kilogram, and his marginal cost of production is $1.44 per kilogram, which increases with output. assume farmer lane is currently earning a profit. can farmer lane do anything to increase his profit in the short run? farmer lane: a. cannot do anything to increase his profit. b. may or may not be able to increase his profit. c. can increase his profit by raising his price. d. can increase his profit by producing more output. e. can increase his profit by shutting down.

Your uncle borrows $53,000 from the bank at 11 percent interest over the nine-year life of the loan. use appendix d for an approximate answer but calculate your final answer using the formula and financial calculator methods. what equal annual payments must be made to discharge the loan, plus pay the bank its required rate of interest