Problem 4 Chapters 5 Present value Analysis and Chapter 6 Uniform Series and Gradient (20 Points) 500 400 300 200 100 Calculate the value of X to suit this cash flow diagram with i = 12%. X is an end of period payment. Provide any modified cash flow diagram(s) necessary for your solution, and show all work. 2 3 4 5 6 7 X X X
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PV of 500: PV = 500 / (1 + 0.12)^1 = 446.43 PV of 400: PV = 400 / (1 + 0.12)^2 = 318.88 PV of X: PV = X / (1 + 0.12)^3 PV of 300: PV = 300 / (1 + 0.12)^4 = 186.22 PV of 200: PV = 200 / (1 + 0.12)^5 = 105.34 PV of 100: PV = 100 / (1 + 0.12)^6 = 49.38 Show more…
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