Part 2. Cash Flow (use the compounding interest table provided on Canvas if needed; present factor notations you used and provide sufficient calculations for each of the following problems) 3. The estimated annual profit for a company over the next seven years is shown in the following table. The company expects that it can invest the money and earn an annual interest rate of 7%. End of year 1 Estimated annual profit $100,000 2 $107,000 3 $114,000 4 $121,000 5 $128,000 $135,000 $142,000 6 7 a. Draw the cash flow diagram that shows the yearly profit amounts. b. Using just the Single Payment Compound Amount Factor (F/P, 1%, N) for each annual amount, what is the future equivalent of the cash flow at the end of year seven? c. Recalculate the future equivalent of the cash flow at the end of year seven using just the Uniform Series Compound Amount Factor (F/A, 1%, N) and the Gradient to Future Equivalent Conversion Factor (F/G, i%, N).

Fig: 1