Final answer:
The future value of the cash flows, use the present value formula. For a discount rate of 8%, the future value in Year 2 is $1,387.03. For a discount rate of 11%, the future value is $1,275.04. For a discount rate of 24%, the future value is $1,169.98.
Step-by-step explanation:
In order to calculate the future value of these cash flows, we need to use the present value formula. The present value formula is PV = CF / (1+r)^n, where PV is the present value, CF is the cash flow, r is the discount rate, and n is the number of periods.
a) For the future value in Year 2 with a discount rate of 8%, we need to find the present value of Year 2 cash flow and then compound it for one year. PV = 1480 / (1+0.08)^2 = $1,283.11. FV = PV * (1+0.08) = $1,387.03.
b) For a discount rate of 11%, PV = 1480 / (1+0.11)^2 = $1,149.59. FV = PV * (1+0.11) = $1,275.04.
c) For a discount rate of 24%, PV = 1480 / (1+0.24)^2 = $943.43. FV = PV * (1+0.24) = $1,169.98.