Assume the appropriate discount rate for the following cash flows is 8.9 percent

Question

Assume the appropriate discount rate for the following cash flows is 8.9 percent. Year Cash Flow 1 $1,450 2 1,350 3 1,050 4 850 What is the present value of the cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places) Assume the appropriate discount rate for the following cash flows is 8.9 percent. Year Cash Flow 1 $1,450 2 1,350 3 1,050 4 850 What is the present value of the cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places) Assume the appropriate discount rate for the following cash flows is 8.9 percent. Year Cash Flow 1 $1,450 2 1,350 3 1,050 4 850 What is the present value of the cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places)

Explanation / Answer

Present value of inflows=cash inflow*Present value of discounting factor(rate%,time period)

=1450/1.089+1350/1.089^2+1050/1.089^3+850/1.089^4

=$3887.26(Approx).

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