Question

General Motors Corporation has invested in a project which is expected to payback the following cash

flows over the next four years. What is the present value of these cashflow if the discount rate is 15%?

Year	Cashflow
1	$1256
2	$1100
3	$925
4	$730

Answer 1

Year	Cash Flow	Present Value factor @ 15%	Present Value
	(i)	(ii)	(i) X (ii)
1	$                    1,256	0.86957	$       1,092
2	$                    1,100	0.75614	$           832
3	$                        925	0.65752	$           608
4	$                        730	0.57175	$           417
Total Present Value of cash Inflows		=	$       2,950
Therefore,
Total Present Value of cash Inflows is $2,950