Find the total present worth of a series of cash flows with an annual interest rate of 2% per year. Round your answer to the nea

Question

3 years ago

5

rest cent.
Initial benefit of 5,330 at year 0

Benefit of 13,075 at year 3

Salvage value of 2,308 at year 4

1 answer:

prisoha [69] · Answer 1 · 2022-10-15T04:50:11+03:00

The total present worth is $19,783.01

The present worth of a series of cash flow is the value of the cash flows in year 0 (today)

Cash flow in year 0 = 5330

Cash flow in year 1 = 0

Cash flow in year 2 = 0

Cash flow in year 3 = 13075 / (1.02)^3 = 12,320.86

Cash flow in year 4 = 2308 / (1.02)^4 = 2,132.24

Present worth = $19,783.01