Wainright Co. has identified an investment project with the following cash flows

Question

Wainright Co. has identified an investment project with the following cash flows.        
   

If the discount rate is 10 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))

What is the present value at 20 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

What is the present value at 30 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Year Cash Flow 1 $ 870 2 1,230 3 1,490 4 1,650

Explanation / Answer

1. present value = 870/(1.1)+ 1230/(1.1)^2+1490/(1.1)^3 + 1650/(1.1)^4 = $4053.869 ~ $4053.87

2. present value = 870/(1.2)+ 1230/(1.2)^2+1490/(1.2)^3 + 1650/(1.2)^4 = $3237.153 ~$3237.15

3. present value = 870/(1.3)+ 1230/(1.3)^2+1490/(1.3)^3 + 1650/(1.3)^4 = $2652.95

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