Question

Eulis Co. has identified an investment project with the following cash flows. Year Cash Flow 1 $ 1,230 2 1,150 3 1,560 4 1,920 If the discount rate is 11 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.) Present value $ What is the present value at 16 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value $ What is the present value at 22 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value $

Answer 1

Answer:

$4,446.90

$3,974.81

$3,506.63

Explanation:

Present value is the value of the sum of discounted cash flows.

Present value can be calculated using a financial calculator:

Cash flow in year 1 = $ 1,230

Cash flow in year 2 = $1,150

Cash flow in year 3 = $1,560

Cash flow in year 3 = $1920

A. Discount rate = 11%

Present value = $4,446.90

B. Discount rate = 16%

Present value = $3,974.81

C. Discount rate = 22%

Present value = $3,506.63

I hope my answer helps you