Question

Eulis Co. has identified an investment project with the following cash flows. Year Cash Flow 1 $ 1,190 2 1,090 3 1,540 4 1,900 If the discount rate is 10 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value $ What is the present value at 18 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value $ What is the present value at 24 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value $

Answer 1

Present value when I is 10% = $4,437.39

Present value when I is 18% = $3,708.86

Present value when I is 24% = $3,279.93

Step-by-step explanation:

Present value is the sum of discounted cash flows.

Present value can be calculated using a financial calculator

Cash flow for year 1 = $ 1,190

Cash flow for year 2= 1,090

Cash flow for year 3 = 1,540

Cash flow for year 4 = 1,900

Present value when I is 10% = $4,437.39

Present value when I is 18% = $3,708.86

Present value when I is 24% = $3,279.93

To find the PV using a financial calacutor:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.

3. Press compute

I hope my answer helps you