Answer:
what is the future value of the cash flows?
$16,872
What is the most this investment is worth today?
$8548
Explanation:
<u>First Payment</u>
$5000 payment will occur Four year from now
$5000 payment will occur Five year from now
$5000 payment will occur six year from now
Interest rate = 12%
Future value at year 6 = (5000 (1+0.12)^2) + (5000 (1+0.12)^1) + 5000
Future value at year 6 = 6272 + 5600 + 5000 = $16,872
Present value of investment = Future Value / (1+r)^n
Present value of investment = $16,872 / (1+0.12)^6
Present value of investment = $8547.88
Present value of investment = $8548 (Rounded off to nearest whole Number)
