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Tju [1.3M]
3 years ago
8

Fuente, Inc., has identified an investment project with the following cash flows. Year Cash Flow 1 $ 1,070 2 1,300 3 1,520 4 2,2

60 a. If the discount rate is 8 percent, what is the future value of these cash flows in Year 4
Business
1 answer:
Leni [432]3 years ago
5 0

Answer:

Total FV= $6,765.82

Explanation:

Giving the following information:

Year Cash Flow 1 $ 1,070 2 1,300 3 1,520 4 2,260

Discount rate= 8%

<u>To calculate the total future value, we need to use the following formula on each cash flow:</u>

FV= Cf*(1 + i)^n

FV1= 1,070*(1.08^3)= 1,347.9

FV2= 1,300*(1.08^2)= 1,516.32

FV3= 1,520*1.08= 1,641.6

FV4= 2,260

Total FV= $6,765.82

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