Refer to the accompanying cash-flow diagram (see Figure P4-77), and solve for the unknown quantity...

Question

Refer to the accompanying cash-flow diagram (see Figure P4-77), and solve for the unknown quantity in Parts (a) through (d) that makes the equivalent value of cash outflows equal to the equivalent value of the cash inflow, F.

a. If F = $10,000, G = $600, and N = 6, then i = ?

b. If F = $10,000, G = $600, and i = 5% per period, then N = ?

c. If G = $1,000, N = 12, and i = 10% per period, then F = ?

d. If F = $8,000, N = 6, and i = 10% per period, then G = ?

David · Accepted Answer

Given, 
Find the values that make equivalent value of cash outflows equal to the equivalent value of the cash inflow, F. 
So,  
………………….Equation 1 
F= future equivalent 
G= gradient amount 
I = rate of interest 
N= number of period 
A) Plugging the given value in the above equation 1 gives,
For the value of " I",

Refer to the accompanying cash-flow diagram (see Figure P4-77), and solve for the unknown quantity in Parts (a) through (d) that makes the equivalent value of cash outflows equal to the equivalent...

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