93.6k views
5 votes
Specter Co. has identified an investment project with the following cash flows. Year Cash Flow 1 $ 810 2 1,110 3 1,370 4 1,500 a. If the discount rate is 11 percent, what is the present value of these cash flows

1 Answer

2 votes

Answer:

3620.46

Step-by-step explanation:

Use basic principles to find the present value of a cash flow

PV(1+i)ⁿ=CF

CF*(1+i)⁻ⁿ=PV

so we would have


810(1+.11)^(-1)+1110*1.11^(-2)+1370*1.11^(-3)+1500*1.11^(-4)=3620.459284

which rounds to 3620.46

User Justmscs
by
7.9k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories