Choose the equation below that can be used to determine the value of "P" for a known interest rate, i.
$$\begin{array} { | l | l | l | l | l | l | l | l | l | l | l | l | }
\hline \text { Year } & 0 & 1 & 2 & 3 & 4 & 5 & 6 & 7 & 8 & 9 & 10 \
\hline \text { Cash flow } & - X & 400 & 500 & - X & 700 & 800 & 900 & 1,000 & 1,100 & 1,200 & 1,300 \
\hline
\end{array}$$
A) P = 10,000(P/F, i%, 5) - 2,000(P/G, i%, 5)
B) P = 10,000- 1,000(P/G, i%, 5) (F/P, i%, 5)
C) P= 10,000(P/F, i%, 5) -2,000(P/G, i%, 5)
D) P= -10,000(P/F, i%, 5) + 2,000(P/G, i%, 4)

Question

Choose the equation below that can be used to determine the value of "P" for a known interest rate, i.
$$\begin{array} { | l | l | l | l | l | l | l | l | l | l | l | l | } 
\hline \text { Year } & 0 & 1 & 2 & 3 & 4 & 5 & 6 & 7 & 8 & 9 & 10 \
\hline \text { Cash flow } & - X & 400 & 500 & - X & 700 & 800 & 900 & 1,000 & 1,100 & 1,200 & 1,300 \
\hline
\end{array}$$
A) P = 10,000(P/F, i%, 5) - 2,000(P/G, i%, 5)
B) P = 10,000- 1,000(P/G, i%, 5) (F/P, i%, 5)
C) P= 10,000(P/F, i%, 5) -2,000(P/G, i%, 5)
D) P= -10,000(P/F, i%, 5) + 2,000(P/G, i%, 4)

Quizplus · Accepted Answer

The equation in option D correctly accounts for the cash flows by using the present value factor (P/F) and the gradient factor (P/G) for the specified years and interest rate.

Choose the Equation Below That Can Be Used to Determine