Exam 3: Cash Flow Analysis

In this question, you are to write down the conversion factors that are required to transform the solid arrows into the equivalent dotted arrow. You can either indicate your answer by marking labelled arrows on the diagram, or by writing down a formula, as in the example given below:

A manufacturing company expects a steady 2% annual growth in profits over the next three years. The company wants to invest the profits at a 10% interest rate. Expected annual profit of the company in year one is $1 000. How much will be accumulated by the company by the end of the third year?

The Croesus Trust Fund currently has $1 million. It was established 10 years ago. The rate of return on the Fund's money has been 5% compounded daily. How much money was originally invested into the Fund?

Juliana paid off a $90 000 debt in 50 months. She paid $3 000 per month and at the end of the first year made an extra payment of $6 000, What interest rate was she charged?

When is the growth-adjusted interest rate for a geometric series equal to zero?

Suppose you are evaluating a project that has various annual payments. These payments do not fall into any of the standard categories you have learned before. How would you approach this project?