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Havana, Inc., has identified an investment project with the following cash flows. If the discount rate...

Havana, Inc., has identified an investment project with the following cash flows. If the discount rate is 10 percent, what is the future value of these cash flows in Year 7? (Hint: Be careful with the number of periods.) If the picture doesn't load, the cash flows shown in the picture are as follows: 910 in year 1; 1140 in year 2; 1360 in year 3; and 2100 in year 4.

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Expert Solution

Discount rate 10.0000%
Cash flows Year Discounted CF= cash flows/(1+rate)^year Cumulative cash flow
                             -   0                                            -                                           -  
                 910.000 1                                   827.27                                827.27
              1,140.000 2                                   942.15                            1,769.42
              1,360.000 3                               1,021.79                            2,791.21
              2,100.000 4                               1,434.33                            4,225.54

Present value = 4,225.54

Future value = 4,225.54 * 1.10^7 = 8,234.38

jeff jeffy answered 2 years ago
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