Your company will generate $46,000 in cash flow each year for the next eleven ye

Question

Your company will generate $46,000 in cash flow each year for the next eleven years from a new information database. The computer system needed to set up the database costs $264,000. Assume you can borrow the money to buy the computer system at 8.75 percent annual interest. Requirement 1: Calculate the present value of the generated cash flows. (Do not include the dollar sign ($). Enter rounded answer as directed, but do not use the rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Explanation / Answer

Hi, Present value is calculated as follows: 46000/ (1.0875) + 46000 /(1.0875)^2 .......... 46000 /(1.0875)^11 = 316771.27 Thanks, Aman

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