In: Finance
4) What is the present value of receiving (the sum of) $30,000 next year, $35,000 in two years, and $40,000 in three years if the interest rate is 4%?
Ans $ 96765.48
Year | Project Cash Flows (i) | DF@ 4% | DF@ 4% (ii) | PV of Project ( (i) * (ii) ) |
1 | 30000 | 1/((1+4%)^1) | 0.961538 | 28,846.15 |
2 | 35000 | 1/((1+4%)^2) | 0.924556 | 32,359.47 |
3 | 40000 | 1/((1+4%)^3) | 0.888996 | 35,559.85 |
PV | 96,765.48 |