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Future Value Calculation Quiz for Business Expansion Projects
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Future Value Calculation Quiz for Business Expansion Projects

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Questions and Answers

What are the cash flows RPG is expecting for its expansion project over the next 8 years?

RPG is expecting the following cash flows over the next 8 years: Year 1 ($1M), Year 2 ($0.5M), Year 3 ($3.0M), Year 4 ($8M), Year 5 ($12M), Year 6 ($15.5M), Year 7 ($12M), Year 8 ($8M).

What is the constant market rate, and how does it affect the company's budget accumulation over the next 8 years?

The constant market rate is 16% yearly, and it affects the company's budget accumulation over the next 8 years by influencing the future value of the cash flows.

How does the Covid-related decrease in inflows during the last 2 years affect the company's budget accumulation?

The Covid-related decrease in inflows during the last 2 years, down 20% and 25% respectively, impacts the company's budget accumulation by reducing the expected cash inflows during those years, resulting in a lower accumulated budget than projected.

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