Ambrin Corp. expects to receive $9,000 per year for 14 years and $10,500 per year for...

Ambrin Corp. expects to receive $9,000 per year for 14 years and $10,500 per year for the next 14 years. What is the present value of this 28 year cash flow? Use an 11% discount rate. Use Appendix D and Appendix B. (Round "PV Factor" to 3 decimal places. Round your intermediate calculations to the nearest dollar value.)

Expert Solution

CALCULATION OF THE PRESENT VALUE OF THE INVESTMENT
End of the year	Cash Received	PVF @ 11%	Present Value
1	$ 9,000	0.901	$ 8,108
2	$ 9,000	0.812	$ 7,305
3	$ 9,000	0.731	$ 6,581
4	$ 9,000	0.659	$ 5,929
5	$ 9,000	0.593	$ 5,341
6	$ 9,000	0.535	$ 4,812
7	$ 9,000	0.482	$ 4,335
8	$ 9,000	0.434	$ 3,905
9	$ 9,000	0.391	$ 3,518
10	$ 9,000	0.352	$ 3,170
11	$ 9,000	0.317	$ 2,856
12	$ 9,000	0.286	$ 2,573
13	$ 9,000	0.258	$ 2,318
14	$ 9,000	0.232	$ 2,088
15	$ 10,500	0.209	$ 2,195
16	$ 10,500	0.188	$ 1,977
17	$ 10,500	0.170	$ 1,781
18	$ 10,500	0.153	$ 1,605
19	$ 10,500	0.138	$ 1,446
20	$ 10,500	0.124	$ 1,302
21	$ 10,500	0.112	$ 1,173
22	$ 10,500	0.101	$ 1,057
23	$ 10,500	0.091	$ 952
24	$ 10,500	0.082	$ 858
25	$ 10,500	0.074	$ 773
26	$ 10,500	0.066	$ 696
27	$ 10,500	0.060	$ 627
28	$ 10,500	0.054	$ 565

		Total	$ 79,846.00

Answer = Present Value of the cash Received mount =			$ 79,846.00

jeff jeffy answered 1 year ago

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