Problem Set
1. Find the present value of the following cash flow stream if the
interest rate is 16 per cent.
0
1
2
3
4
5
6
$400
$100
$200
$0
$0
$0
2. Find the present value of $600 to be recieved 7 years from today
if the interest rate is 6 per cent.
3. Find the present value of an annuity of $400 per year for 11
years if the interest rate is 19 per cent.
4. Find the present value of the following cash flow stream if the
interest rate is 3 per cent.
0
1
2
3
4
5
$100
$400
$300
$200
$200
5. Find the present value of $400 to be recieved 5 years from today
if the interest rate is 3 per cent.
6. Find the present value of an annuity of $900 per year for 8 years
if the interest rate is 3 per cent.
7. Find the present value of $100 to be recieved 10 years from
today if the interest rate is 8 per cent.
8. Find the present value of $400 to be recieved 3 years from today
if the interest rate is 11 per cent.
9. Find the present value of the following cash flow stream if the
interest rate is 20 per cent.
0
1
2
3
4
5
$300
$100
$300
$300
$100
10. Find the present value of the following cash flow stream if the
interest rate is 9 per cent.
0
1
2
3
4
5
$100
$100
$100
$500
$500
QUIZ
Given the cash flows of the two companies with the same
deposit amount within five years and 15% discount rate, which of them
you will entrust your investment accounts?
JUSTIFY your choice.
YEAR
0
1
2
3
4
WORLD FINANCE
ALLIANCES
500
300
200
300
100
GLOBAL CORPORATE
FINANCE
300
300
100
500
200