question archive Find the present value of the following cash flows assuming interest rate is 4
Find the present value of the following cash flows assuming interest rate is 4
Subject:FinancePrice:2.86 Bought3
Find the present value of the following cash flows assuming interest rate is 4.72 (3 points)
Today Year 1 Year 2 Year 3 Year 4 Year 5
Cash flow 0 $900 -$400 $1,000 -$1,300 $1,980
Purchase A New Answer
Custom new solution created by our subject matter experts
GET A QUOTE
Answer Preview
Present value = summation(Cashflows/(1+Interestrate)^Years
Today is year 0, so
PV= 0/1.0472^0+(900/1.0472^1)+(-400/1.0472^2)+(1000/1.0472^3)+(-1300/1.0472^4)+(1980/1.0472^5)
PV=0+859.43-364.75+870.79-1081+1572.23
Present value = $1856.70
