The combined value available to GIC in terms of the present value as of
December 2050 is $5,050,413.22
What are year 1 cash flows to GIC?
GIC is entitled to 50% of the cash inflows of the joint venture both in UK and South Korea in years 1 and 2
Annual cash flow=(1,000,000*1.02*50%)+(6,000,000,000/1250*50%)
Annual cash flow=$2,910,000
Now the present value of years 1 and 2 cash flows can be determined using the present value formula of a single cash flow provided below:
PV=FV/(1+r)^N
PV=present value=unknown
FV=future cash flows in years 1 and 2
r=discount rate=10%
N=years of cash flow,1 for year and 2 for year 2
PV=2,910,000/(1+10%)^1+2,910,000/(1+10%)^2
PV=$5,050,413.22
Find out more about present value on:brainly.com/question/23741882
#SPJ1
