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A special investment project will require 5 years of planning and implementation, but will allow your firm to receive $350,000 at the end of years 6, 7, 8, 9, and 10. If the appropriate discount rate is
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A special investment project will require 5 years of planning and implementation, but will allow your firm to receive $350,000 at the end of years 6, 7, 8, 9, and 10. If the appropriate discount rate is 13%, what is the present value of those cash flows

User Zeimyth
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1 Answer

6 votes

Answer: $668,154

Step-by-step explanation:

The present value would be the sum of the present values of the five cashflows.

= 350,000 / 1.13⁶ + 350,000 / 1.13⁷ + 350,000 / 1.13⁸ + 350,000 / 1.13⁹ + 350,000 / 1.13¹⁰

= $668,154.28

= $668,154

User Ericka
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