Question
In: Finance
McCann Co. has identified an investment project with the following cash flows. Year Cash Flow 1...
|
McCann Co. has identified an investment project with the following cash flows. |
| Year | Cash Flow |
| 1 | $950 |
| 2 | 1,050 |
| 3 | 1,260 |
| 4 | 1,140 |
| a. |
If the discount rate is 9 percent, what is the present value of these cash flows? |
| b. |
What is the present value at 18 percent? |
| c. | What is the present value at 29 percent? |
Solutions
Expert Solution
Ans a) $ 3535.88
b) $ 2914.05
c) $ 2366.02
| Year | Project Cash Flows (i) | DF@ 9% (ii) | PV of Project A ( (i) * (ii) ) | DF@ 18% (iii) | PV of Project A ( (i) * (iii) ) | DF@ 19% (iv) | PV of Project A ( (i) * (iv) ) | |
| 1 | 950 | 0.917 | 871.56 | 0.847 | 805.08 | 0.775 | 736.43 | |
| 2 | 1050 | 0.842 | 883.76 | 0.718 | 754.09 | 0.601 | 630.97 | |
| 3 | 1260 | 0.772 | 972.95 | 0.609 | 766.87 | 0.466 | 586.95 | |
| 4 | 1140 | 0.708 | 807.60 | 0.516 | 588.00 | 0.361 | 411.67 | |
| NPV | 3,535.88 | NPV | 2,914.05 | NPV | 2,366.02 | |||
jeff jeffy answered 1 year agoRelated Solutions
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If the discount rate is 10 percent, what is the present value of
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If the discount rate is 10 percent, what is the present value of
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What is the present value at 16 percent?
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If the discount rate is 11 percent, what is the present value of
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intermediate calculations and round your answer to 2 decimal
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