In: Finance
Your company expects cash flows of $4,000 per week over the next 2 years. Calculate the present value of these cash flows if the discount rate provided to you by your accountant is 11%.
| Cash flow per week = | $ 4,000 | 
| No weeks in 2 years =52*2= | 104 | 
| Discount rate =11% pa=11%/52 per week= | 0.2115% per week | 
| PV Annuity factor @0.2115% rate for 104 week period=(1-1.002115^-104)/0.2115%=93.26659 | |
| So PV of $4000 per week cash flow for 104 weeks =4000*93.26659=$373,066.35 |