Cannonier, Inc., has identified an investment project with the following cash fl

Question

Cannonier, Inc., has identified an investment project with the following cash flows. Year 2 4 Cash Flow $ 960 1,190 1,410 2,150 If the discount rate is 9 percent, what is the future value of these cash flows in Year 4? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Future value What is the future value at a discount rate of 12 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Future value What is the future value at a discount rate of 23 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Future value

Explanation / Answer

future value can be known using the formula

A (1+r)^n

A is the deposit amount

r = rate of interest

n =number of years

so for year 1 deposit it will be =3 years, year 2 = 2 years , year 3 = 1 year and year 4 = 0 years....(till the end of 4th year).

so

1st part :

discount rate = 9%

2.future value at a discount rate of 12%.

3.discount rate 23%

year cash flow future value 1 960 960*(1.09)^3=>1,243.22784 2 1,190 1,190*(1.09)^2=>1,413.839 3 1,410 1,410*(1.09)^1=>1,536.90 4 2,150 2,150*(1.09)^0=>2,150 Total $6,343.97

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