Question

Rooster Co. has identified an investment project with the following cash flows.

Year	Cash Flow
1		$	1,190
2			1,090
3			1,540
4			1,900

Requirement 1:

If the discount rate is 10 percent, what is the present value of these cash flows? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Present value

$

Requirement 2:

What is the present value at 18 percent? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Present value

$

Requirement 3:

What is the present value at 24 percent? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Present value

$

Answer 1

Answer:
1. Calculation of Present value @10%
Year	Cash flows	Present value factor @10%	Present value
1	1190	0.9091	1081.82
2	1090	0.8264	900.83
3	1540	0.7513	1157.02
4	1900	0.6830	1297.73
		Total	4437.39
Present value is $4,437.39 (Answer)
2. Calculation of Present value @18%
Year	Cash flows	Present value factor @18%	Present value
1	1190	0.8475	1008.47
2	1090	0.7182	782.82
3	1540	0.6086	937.29
4	1900	0.5158	980.00
		Total	3708.59
Present value is $3,708.59 (Answer)
3. Calculation of Present value @24%
Year	Cash flows	Present value factor @24%	Present value
1	1190	0.8065	959.68
2	1090	0.6504	708.90
3	1540	0.5245	807.71
4	1900	0.4230	803.65
		Total	3279.93
Present value is $3,279.93 (Answer)