Question

Fuente, Inc., has identified an investment project with the following cash flows. Year Cash Flow 1 $ 1,075 2 1,210 3 1,340 4 1,420 a. If the discount rate is 8 percent, what is the future value of the cash flows in Year 4? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. If the discount rate is 11 percent, what is the future value of the cash flows in Year 4? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. If the discount rate is 24 percent, what is the future value of the cash flows in Year 4? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Answer 1

Answer:

Instructions are listed below

Explanation:

Giving the following information:

Year1= 1,075

Year 2= 1,210

Year 3= 1,340

Year 4= 1,420

We need to use the following formula:

FV= ∑PV*(1+i)^n

A) i=0.08

FV= 6,083.35

B) i=0.11

FV= $6513.97

C) i= 0.24

FV= 8669.73