Mathias Corporation has a project that has the following cash flows: t Cash Flow
ID: 2636878 • Letter: M
Question
Mathias Corporation has a project that has the following cash flows:
t Cash Flow
0 -$2,500.00
1 875.00
2 425.00
3 ?
4 500.00
What cash flow will the project have to provide at t = 3 in order for the project to have a 6% rate of return? Assume that all cash flows occur at the end of the year
Explanation / Answer
-2500 +875/1.06 + 425/1.06^2 + x/1.06^3 + 500/1.06^4 =0
x= -1072.19
cash flow at the end of year 3 = -1072.19