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 Cash Flow $1,100 1,330 1,550 2,290 Year 3 4 Requirement 1: If the discount rate is 6 percent, what is the future value of these cash flows in Year 4? (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) Future value Requirement 2: What is the future value at an interest rate of 14 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).) Future value Requirement 3: What is the future value at an interest rate of 21 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).) Future value

Explanation / Answer

1.

Year Cash flows Discount rate 6% FV of cash flows

1 $1100 (1+6%)3 $1310.12

2 $1330 (1+6%)2 $1494.39

3 $1550 (1+6%)1 $1643

4 $2290 $2290

Total future value of cash flows $6737.51

2.

Year Cash flows Discount rate 14% FV of cash flows

1 $1100 (1+14%)3 $1629.70

2 $1330 (1+14%)2 $1728.47

3 $1550 (1+14%)1    $1767

4 $2290 $2290

Total future value of cash flows $7415.17.

3.

Year Cash flows Discount rate 21% FV of cash flows

1 $1100 (1+21%)3 $1948.72

2 $1330 (1+21%)2 $1947.25

3 $1550 (1+21%) $1875.5

4 $2290 $2290

Total future value of cash flows $8061.47.

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.