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What is the present value of a stream of cash flows of $125,000 at a discount rate of 7%?
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What is the present value of a stream of cash flows of $125,000 at a discount rate of 7%?

User Earlene
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1 Answer

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Answer:

Present value = Cashflow

Discount rate

Present value = $125,000

0.07

Present value = $1,785.71

Step-by-step explanation:

In this case, we will apply the formula for present value of perpetuity, which equals cashflow divided by the discount rate. The present value of perpetuity formula is applied because the cashflows are indefinite ie the number of years were not provided.

User Nizar Grira
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