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)?

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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 ago

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