Question

Calculate the present value of the given stream of cash flows using the given discount rate. The present value you find is between $24,000 and $24,100. time cash flows discount rate 0 5% 1 $1,000 2 $1,500 3 $2,000 4 $2,500 5 $3,000 6 $3,500 7 $4,000 8 $4,500 9 $5,000 10 $5,500

Answer 1

Answer:

$23,547.76

Explanation:

The present value is the sum of discounted cash flows.

Present value can be calculated using a financial calculator:

Cash flows each year:

1 = $1,000

2 = $1,500

3 = $2,000

4 = $2,500

5 = $3,000

6 = $3,500

7 = $4,000

8 = $4,500

9 = $5,000

10 = $5,500

I = 5%

To find the PV using a financial calacutor:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.

3. Press compute

I hope my answer helps you