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Business, 02.10.2019 03:00 babiibri4771

Suppose that you pay $1,000 at time 0, get $4,000 at time 1, and pay $2,000 at time 2. let c0 = $1,000,c1 = −$4,000, and c2 = $2,000. set c = c0 +c1 +c2 = $1, 000 − $4, 000 + $2, 000 = −$1, 000. find t such that getting an inflow of −c at time t has the same present value as the above sequence of financial transactions, assuming that the growth of money is governed by compound interest at i = 1%. show that t is greater than the weighted average t = c0 0 + c1 1 + c2 2. [this shows that inequality ccc (2.3.11) need not hold if you have a negative contribution.]

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Suppose that you pay $1,000 at time 0, get $4,000 at time 1, and pay $2,000 at time 2. let c0 = $1,0...
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