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What is the present value of following streams of future cash flows if the discount rate is 11%?

Year 1: $10,000

Year 2: $11,000

Year 3: $13,000

a. $35,847

b. $27,949

c. $33,521

d. $29,067

e. None of the above

User Nibb
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1 Answer

2 votes

Answer:

b. $27,949

Step-by-step explanation:

The computation of the present value is presented below

Year Amount DF factor @ 11% Present value

1 $10,000 0.90909 $9,090.91

2 $11,000 0.82645 $9,090.85

3 $13,000 0.75131 $9,767.03

Total $27,948.79

User Fenda
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