Question 4 (3 points) On January 1, KuchuKuchu Company invested in an asset with auseful life of 3 years. The company'sexpected rate of return is 10%. The cashflow and present and future value factorsfor 3 years are as follows:Year Cash Inflow from Present value Future valuethe Assets of P1 at 10% of P1 at 10%1P8,0000.911.10P9,0000.831.213P10,0000.751.33All cash inflows are assumed to occur at year-end. If theasset generates a positive net present value of P2,000,what was the amount of the original investment?

Solution: Amount of original investment = Present value of cash inflows - NPV Present value of…

Answered: Question 4 (3 points) On January 1,…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A6) Finance A financial instrument provides three future cash flows: $1,710.00 at the end of 3 years $1,051.74 at the end of 8 years $2,105.93 at the end of 14 years Calculate the duration (D) of the financial instrument at a yield of 6% pa compounded yearly. Give your answer in years to 2 decimal places. D = years
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