Question
In: Finance
Glendora Ridge Company has a project opportunity that requires $576.32 initial investment (cash outflows) today and...
Glendora Ridge Company has a project opportunity that requires $576.32 initial investment (cash outflows) today and this project is expected to generate cash inflows of $150 in year 1, $175 in year 2, $200 in year 3, and $X in year 4. If the project rate of return is 8%, calculate the project cash inflow in year 4 (calculate what is $X)?
Solutions
Expert Solution
rate positively ..
| Year | Cash flow | PVIF @ 8% | Present value |
| 0 | -576.32 | $ 1.0000 | (576.32) |
| 1 | 150 | $ 0.9259 | 138.89 |
| 2 | 175 | $ 0.8573 | 150.03 |
| 3 | 200 | $ 0.7938 | 158.77 |
| 4 | x | $ 0.7350 | 0.7350*x |
| Therefore we have below equation | |||
| 0.7350*x= | 128.6303694 | ||
| x= | $ 175.00 | ||
| Ans= | $ 175.00 |
jeff jeffy answered 2 years agoRelated Solutions
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