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tangare [24]
3 years ago
5

Fox Co. has identified an investment project with the following cash flows. Year Cash Flow 1 $ 1,250 2 1,180 3 1,570 4 1,930 a.

If the discount rate is 12 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.) b. What is the present value at 15 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the present value at 21 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Business
1 answer:
yulyashka [42]3 years ago
3 0

Answer: a. $4400.81

b. $4114.99

c. $3625.60

Explanation:

Present value of money is the worth of money at a particular period of time.

a. If the discount rate is 12 percent, what is the present value of these cash flows?

Present value at 12% will be:

= 1250/1.12 + 1180/1.12^2 + 1570/1.12^3 + 1930/1.12^4

= $4400.81

b. What is the present value at 15 percent?

Present value at 15% will be:

= 1250/1.15 + 1180/1.15^2 + 1570/1.15^3 + 1930/1.15^4

= $4114.99

c. What is the present value at 21 percent?

Present value at 21% will be:

= 1250/1.21 + 1180/1.21^2 + 1570/1.21^3 + 1930/1.21^4.

= $3625.60

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<h3>What is a Property's Effective Age?</h3>

The effective age of a property can be described as the reflection of the true life of the property that is left remaining, based on the life expectancy that is typical of equipment or buildings that are similar to it and their usage.

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