If the discount rate is 8 percent, what is the present value of these cash flows
ID: 2816598 • Letter: I
Question
If the discount rate is 8 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
If the discount rate is 18 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
If the discount rate is 24 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Wilkinson Co. has identified an investment project with the following cash flows:
Explanation / Answer
Present value of inflows=cash inflow*Present value of discounting factor(rate%,time period)
1.Present value=730/1.08+950/1.08^2+1210/1.08^3+1300/1.08^4
=$3406.47(Approx).
2.Present value=730/1.18+950/1.18^22+1210/1.18^3+1300/1.18^4
=$2707.89(Approx).
3.Present value=730/1.24+950/1.08^24+1210/1.24^3+1300/1.24^4
which is equal to
=$2391.05(Approx).
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.