You are scheduled to receive a $420 cash flow in one year, a $920 cash flow in t

Question

You are scheduled to receive a $420 cash flow in one year, a $920 cash flow in two years, and pay a $720 payment in three years. Interest rates are 10 percent per year.

What is the combined present value of these cash flows? (Do not round intermediate calculations and round your final answer to 2 decimal places.

Combined present value of cash flows

You are scheduled to receive a $420 cash flow in one year, a $920 cash flow in two years, and pay a $720 payment in three years. Interest rates are 10 percent per year.

Explanation / Answer

Statement showing computation of Combined present value of cash flows

   Amount in $

Years Cash Flows PV of cash flows @ 10%

1 420 381.82

2 920 760.33

3 (720) (540.95)

Combined Present value of cash flows 601.20

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