- Required Indicate Which Of The Following Items Will Result In Cash Inflows And Which Will Result In Cash Out Flows The 1 (63.34 KiB) Viewed 24 times
Required Indicate which of the following items will result in cash inflows and which will result in cash out- flows. The first one is shown as an example. Item a. Initial investment b. Salvage value c. Recovery of working capital d. Incremental expenses e. Working capital commitments f. Cost savings g. Incremental revenue Type of Cash Flow Outflow Exercise 10-2A Determining the present value of a lump-sum future cash receipt Larry Mattingly turned 20 years old today. His grandfather had established a trust fund that will pay i him $120,000 on his next birthday. However, Larry needs money today to start his college educa- tion, and his father is willing to help. Mr. Mattingly has agreed to give Larry the present value of the $120,000 future cash inflow, assuming a 6 percent rate of return. Required Round your figures to the nearest whole dollar. a. Use a present value table to determine the amount of cash that Larry Mattingly's father should give him. b. Use an algebraic formula to prove that the present value of the trust fund (the amount of cash computed in Requirement a) is equal to its $120,000 future value. tung nach rocaint