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Fle Edit View History Bookmarks People Window Help anneet Secure .mheducation.com/flow/connect.htm mework Chapters 10ms 12 Help 2 Some of the following future cash flows have been expressed in then-current (Muture) dollars and others in CV dollars. Use an interest rate of 10% per year and an inflation rate of 6% per year. Find the present worth with all cash fows expressed in future dolars. Year 34 cv Then-current Yhen-current Cv The present worth with all cash flows expressed in future dollars is S Reference inks

Explanation / Answer

Year Cash Flows, $ Expressed as In Future Dollars 0 15,300 CV x 1.06^0 $      15,300.00 3 32,500 Then-current NA $      32,500.00 4 14,100 Then-current NA $      14,100.00 7 26,100 CV x 1.06^7 $      39,244.75 Year Cash Flows, $ in Future Value PVF at 10% Present value 0 $    15,300.00 x 1.10^-0 1 $      15,300.00 3 $    32,500.00 x 1.10^-3 0.751314801 $      24,417.73 4 $    14,100.00 x 1.10^-4 0.683013455 $        9,630.49 7 $    39,244.75 x 1.10^-7 0.513158118 $      20,138.76 Present worth $      69,486.98 Ans

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