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iris [78.8K]
3 years ago
6

You are considering a project which will provide annual cash inflows of $4,500, $5,700, and $8,000 at the end of each year for t

he next three years, respectively. What is the present value of these cash flows, given a 9% discount rate?
Business
1 answer:
liraira [26]3 years ago
3 0

Answer:

Total PV= $15,103.49

Explanation:

Giving the following information:

Cf1= 4,500

Cf2= 5,700

Cf3= 8,000

Discount rate= 9%

<u>To calculate the present value, we need to use the following formula on each cash flow:</u>

PV= FV/(1+i)^n

Cf1= 4,500/(1.09)= $4,128.44

Cf2= 5,700/1.09^2= $4,797.58

Cf3= 8,000/1.09^3= $6,177.47

Total PV= $15,103.49

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