Question

ou are considering a project with cash flows of $16,500, $25,700, and $18,000 at the end of each year for the next three years, respectively. What is the present value of these cash flows, given a discount rate of 9.7 percent

Answer 1

Total PV= $50,032

Step-by-step explanation:

Giving the following information:

$16,500, $25,700, and $18,000

Cf1= $16,500

Cf2= $25,700

Cf3= $18,000

Discount rate= 9.7%

To calculate the present value, we need to use the following formula:

PV= FV/(1+i)^n

Cf1= 16,500/(1.097)= 15,041

Cf2= 25,700/1.097^2= 21,356

Cf3= 18,000/1.097^3= 13,635

Total PV= $50,032