Answer:
$1,155,478
Explanation:
Present value is the sum of discounted cash flows
Present value can be found using a financial calculator
Cash flow in year 1 = $100,000
Cash flow in year 2 = $20,000
Cash flow in year 3 = $480,000
Cash flow in year 4 = $450,000
Cash flow in year 5 = $550,000
I = 9%
Present value = $1,155,478
To find the PV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
