Rooster Co. has identified an investment project with the following cash flows.
ID: 2628180 • Letter: R
Question
Rooster Co. has identified an investment project with the following cash flows.
If the discount rate is 9 percent, what is the present value of these cash flows? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)
What is the present value at 17 percent? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)
What is the present value at 23 percent? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)
year cashflow 1 $1130 2 $1,000 3 $1,510 4 $1,870Explanation / Answer
Discount rate= 9%
Present value = 1130/1.09 +1000/1.09^2 + 1510/1.09^3 + 1870/1.09^4= 4,369.13
Discount rate= 17%
Present value = 1130/1.17 +1000/1.17^2 + 1510/1.17^3 + 1870/1.17^4= $3637.05
Discount rate= 23%
Present value = 1130/1.23 +1000/1.23^2 + 1510/1.23^3 + 1870/1.23^4= $ 3,208.13
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