Finance Chapter 4

  1. Differentiate between two types of cash flows.
    • Inflows are positive cash flows (+)
    • Outflows are negative cash flows (-)
  2. What is the difference in a Perpetuity and an Annuity?
    Annuities have a finite series of cash flows.  A Perpetuity has an infinite series of cash flows.
  3. What is a Growing Perpetuity and a Growing Annuity?
    • When cash flows do not remain the same and grow at a constant rate.
    • g = growth rate of cash flows
  4. What do T and represent?
    • T = Time of last cash flow
    • = Time of 1st cash flow
Author
Chas
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337768
Card Set
Finance Chapter 4
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Finance Chapter 4
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