You are offered an investment that will pay you $150 at the end of year one,...

You are offered an investment that will pay you $150 at the end of year one, $250 at the end of year four, and $800 at the end of year eight. What is the total present value of these three cash flows if the discount rate is 6%?

Expert Solution

total present value of these three cash flows	841.46
Statement showing Cash flows
Particulars	Time	PVf 6%	Amount	PV
Cash inflows	1.00	0.9434	150.00	141.51
Cash inflows	2.00	0.8900		-
Cash inflows	3.00	0.8396		-
Cash inflows	4.00	0.7921	250.00	198.02
Cash inflows	5.00	0.7473		-
Cash inflows	6.00	0.7050		-
Cash inflows	7.00	0.6651		-
Cash inflows	8.00	0.6274	800.00	501.93
PV of Cash Inflows =PVCI				841.46

jeff jeffy answered 7 months ago

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