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statuscvo [17]
2 years ago
11

Ransport Company has made an investment in another company that will guarantee it a cash flow of $37,250 each year for the next

five years. If the company uses a discount rate of 15 percent on its investments, what is the present value of this investment?
Business
1 answer:
ExtremeBDS [4]2 years ago
5 0

Answer:

PV= $124,867.78

Explanation:

Giving the following information:

Cash flow= $37,250

Discount rate= 15%

Number of periods= 5 years

<u>To calculate the present value, we need to use the following formula:</u>

PV= A*{(1/i) - 1/[i*(1 + i)^n]}

PV=  37,250*{(1/0.15) - 1/[0.15*(1.15^5)]}

PV= $124,867.78

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5 0
3 years ago
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Answer:

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Hope this helps!

7 0
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