Question

Wainright Co. has identified an investment project with the following cash flows. Year Cash Flow 1 $ 850 2 1,190 3 1,450 4 1,600 If the discount rate is 7 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Answer 1

$4,238.05

Step-by-step explanation:

The computation of the present value is shown below:

Years Cash flows Discount factor @7% Present value

1 $850.00 0.9345794393 $794.39

2 $1,190.00 0.8734387283 $1,039.39

3 $1,450.00 0.8162978769 $1,183.63

4 $1,600.00 0.762895212 $1,220.63

Total present value $4,238.05