Question

In: Finance

Assume the appropriate discount rate for the following cash flows is 10.3 percent. Year Cash Flow...

Assume the appropriate discount rate for the following cash flows is 10.3 percent.
Year Cash Flow
1 $2,150           
2 2,050           
3 1,750           
4 1,550           

What is the present value of the cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Solutions

Expert Solution

Ans $ 5985.54

Year Project Cash Flows (i) DF@ 10.3% DF@ 10.3% (ii) PV of Project ( (i) * (ii) )
1 2150 1/((1+10.3%)^1) 0.907                       1,949.23
2 2050 1/((1+10.3%)^2) 0.822                       1,685.01
3 1750 1/((1+10.3%)^3) 0.745                       1,304.10
4 1550 1/((1+10.3%)^4) 0.676                       1,047.20
PV                       5,985.54

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