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nalin [4]
4 years ago
10

Cbs company invested in a project that is expected to have an annual cash flow of $10,000. the project's life is five years and

has an irr of 14 percent. how much was the initial investment in the project?
Business
1 answer:
Shtirlitz [24]4 years ago
5 0
Use the formula of the present value of an annuity ordinary which is
Pv=pmt [(1-(1+r)^(-n))÷r]
Pv initial investment?
PMT annual cash flow 10000
R interest rate 0.14
N time 5years
Pv=10,000×((1−(1+0.14)^(−5))÷(0.14))
pv=34,330.81
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