Using the information provided Find the Value A assest B C

?Using the information provided

Find the Value A assest, B , C, D and E.

Asset   End of Year   Amount Appropiate require amount
A 1 6,000 19%
2 6,000  
3 6,000  
B   1 through &inf; 200 15%
C   1 0 17%
2 0  
3 0  
4 0  
5 40,000  
D   1 through 5 1,200 12%
6 9,000  
E   1 6,000 14%
2 7,000  
3 9,000  
4 11,000  
5 8,000  
6 5,000  

Solution

Value of asset =cf1/(1+r)^1+cf2/(1+r)^2 +cf 3/(1+r)^3 and so on

A. Here cash flow is equal for all the three year

So value =p*((1-(1/(1+r)^n) /r)

=6000*((1-(1/(1.19)^3/0.19) =$12839. 50

B. Equal amount till perpetuity

Value=pmt/r=200/.15=1333.33

C only one cash flow at year 5

Value=cf/(1+r)^5=40000/(1.17^5) =18244.45

D same cash flow till 5th year an final cash flow at 6th year

Value =p*((1-(1/(1+r)^n) /r) +final cashflow/(1+r)^n

=1200*(1-(1/1.12^5)/.12)+9000/1.12^5

=4325.73+5106.84

=9432.57

E 6000/1.17+7000/1.14^2+9000/1.14^3+11000/1.14^4+8000/1.14^5+5000/1.14^6

=5128.21+5386.27+6074.74+6512.88+4154.95+2277.93

=29534.98