Question
In: Finance
Seaborn Co. has identified an investment project with the following cash flows.
|
Seaborn Co. has identified an investment project with the following cash flows. |
| Year | Cash Flow |
| 1 | $800 |
| 2 | 1,000 |
| 3 | 1,330 |
| 4 | 1,160 |
| Required: | |
| (a) |
If the discount rate is 10 percent, what is the present value of these cash flows? |
| (Click to select) 3,679.79 3,268.96 3,424.40 4,290.00 3,345.26 | |
| (b) |
What is the present value at 18 percent? |
| (Click to select) 2,746.13 3,308.65 4,290.00 3,635.58 2,803.94 |
| (c) | What is the present value at 28 percent? |
| (Click to select) 2,345.12 2,259.53 4,290.00 2,301.68 2,946.15 |
Solutions
Expert Solution
PV = FV / (1 + r)^t
(a) PV = $800/1.10 + $1,000/1.10^2 + $1,330/1.10^3 + $1,160/1.10^4 = $3,345.26
(b) PV = $800/1.18 + $1,000/1.18^2 + $1,330/1.18^3 + $1,160/1.18^4 = $2,803.94
(c) PV = $800/1.28 + $1,000/1.28^2 + $1,330/1.28^3 + $1,160/1.28^4 = $2,301.68
jeff jeffy answered 2 years agoRelated Solutions
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Seaborn Co. has identified an investment project with the
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Year
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Required:
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If the discount rate is 10 percent, what is the present value of
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If the discount rate is 11 percent, what is the present value of
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(Click to
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(b)
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(Enter rounded...
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