Havana, Inc., has identified an investment project with the following cash flows

Question

Havana, Inc., has identified an investment project with the following cash flows.

Requirement 1: Assume the discount rate is 6 percent, what is the future value of these cash flows in Year 4? (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).) Future value $

Requirement 2: What is the future value at an interest rate of 14 percent? (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).) Future value $

Requirement 3: What is the future value at an interest rate of 21 percent? (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).) Future value $

Explanation / Answer

Statement showing computations @6% Year Cash flow Future Value at end of Year 4 Working Notes                                                                             1.00                  1,060.00                                                1,262.48 1060*1.06*1.06*1.06                                                                             2.00                  1,290.00                                                1,449.44 1290*1.06*1.06                                                                             3.00                  1,510.00                                                1,600.60 1510*1.06                                                                             4.00                  2,250.00                                                2,250.00 2250                  6,110.00                                                6,562.52 Statement showing computations @14% Year Cash flow Future Value at end of Year 4 Working Notes                                                                             1.00                  1,060.00                                                1,570.44 1060*1.14*1.14*1.14                                                                             2.00                  1,290.00                                                1,676.48 1290*1.14*1.14                                                                             3.00                  1,510.00                                                1,721.40 1510*1.14                                                                             4.00                  2,250.00                                                2,250.00 2250                  6,110.00                                                7,218.32 Statement showing computations @21% Year Cash flow Future Value at end of Year 4 Working Notes                                                                             1.00                  1,060.00                                                1,877.85 1060*1.21*1.21*1.21                                                                             2.00                  1,290.00                                                1,888.69 1290*1.21*1.21                                                                             3.00                  1,510.00                                                1,827.10 1510*1.21                                                                             4.00                  2,250.00                                                2,250.00 2250                  6,110.00                                                7,843.64

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