The present value of the following cash flow stream is $8,250 when discounted at 8.7 percent annually. What is the value of the
missing cash flow? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
1 answer:
Answer:
The question is not complete,find attached complete question.
The missing cash flow is $2,901.77
Explanation:
In order to calculate the missing cash flow, I discounted the other cash flows given to present values using the formula PV=FV/(1+r)^n as is it in the attached spreadsheet.
Thereafter , I equated the present values to the total present value of $8250 given using X for the unknown cash flow, by solving this equation I arrived at the present value of the missing cash flow .
Finally, I multiplied the present value of the missing cash flow with its discounting factor of 1.1816 , hence I arrived at the missing cash flow of $ 2,901.77
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