Purchase Solution

Develop a cash flow diagram (CFD) for an alternative

Not what you're looking for?

Ask Custom Question

1) If an alternative has monthly payments of $12,000 a month for three years with a
purchase price of $75,000 at the end of year three, what would the cash flow diagram
look like? Select the correct choice from each pair of answers.

A: $144,000 EOY 1
B: $144,000 MOY 1

C: $144,000 EOY 2
D: $144,000 MOY 2

E: $144,000 EOY 3
F: $144,000 MOY 3

G: $75,000 EOY 3
H: $75,000 MOY 3

Purchase this Solution
Solution Summary

Using the examples, the correct choice from two alternatives is chosen for the cash flow diagram based on EOY (End of Year) or MOY (Middle of Year).

Solution Preview

Dear student,

The full solution is attached with the required explanation.

Regards,
Radhika

Conditions for EOY/MOY categorization:
EOY: To assume for investments or receipts (at year 0), for salvage value or disposal ...

Solution provided by:
Radhika Lakshmi, MPhil
Education
  • MPhil, Madurai Kamaraj University
  • MCom, Annamalai University
  • IATA, International Air Transport Association
Recent Feedback
  • "Great explanations on how the answers were obtained."
  • "Love the way she explains everything step by step."
  • "Solutions were thoroughly explained."
  • "Excellent explanations of how problems are solved"
  • "Thanks"
Purchase this Solution
Free BrainMass Quizzes
Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

View More Free Quizzes
Related BrainMass Solutions

  • Cost Analysis Economic Analysis: Develop a cash flow diagram

    652495 Cost Analysis Economic Analysis: Develop a cash flow diagram If an alternative has monthly payments of $12,000 a month for three years with a purchase price of $75,000 at the end of year three, what would the cash flow diagram look like?

  • Cash Flow for EOY or MOY

    590647 Cash Flow for EOY or MOY If an alternative has monthly payments of $10,000 a month for three years with a purchase price of $75,000 at the end of year three, what would the cash flow diagram look like?

  • Machinery Maintenance Cost Management

    What present sum of money would need to be set aside now to pay the maintenance for the eight-year period? Assume 6% interest. including a cash flow diagram (b) Economic analysis is useful in deciding between alternative design concepts.

  • Evaluating Using Traditional NPV and the Real Options Approach

    Real Options Approach (all cash flows are after tax) Now, evaluate the investment using managerial flexibility and a real options approach. The real options alternative allows for flexibility and the delay of the investment for 1 year.

  • Cash Flow Diagram of Inflows and Outflows

    This solution provides a cash flow diagram in Excel and answers various business analysis questions.

  • Develop a business model for a cruise line company

    254992 Develop a business model for a cruise line company What should I include in a business model for a cruise line company (Royal Caribbean)? I will be making this into a diagram that shows the inflows/outflows of money.

  • Cash Flows, terminal cash flow, cash diagram, NPV, IRR

    264564 Cash Flows, terminal cash flow, cash diagram, NPV, IRR It's been two months since you took a position as an assistant financial analyst at Caledonia Products.

  • Working Capital

    SEE DIAGRAM IN ATTACHED RESPONSE As illustrated in the diagram above, cash flows in a cycle into, around and out of a business. It is the business's lifeblood.

  • Present Value

    for A Since alternative A has the highest present value, it should be selected Compares three investment alternatives by computing discounted values of cash flows.

View More Related Solutions