McCann Co. has identified an investment project with the following cash flows. 2
ID: 2817631 • Letter: M
Question
McCann Co. has identified an investment project with the following cash flows. 2 3 4 $ 910 .310 1.570 1,750 points eBook Hint Print o. If the discount rate is 11 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g. 32.16) and round your answer to 2 decimal places, eg., 32.16.) and round your answer to 2 decimal places, e.g., 32.16.) b. What is the present value at 20 percent? (Do not round intermediate calculations c. What is the p resent value at 30 percent? (Do not round intermediate calculations a. b. c. Present value at 11% | Present value at 20% | Present value at 30%Explanation / Answer
.
Year
Cash Flow
PV Factor of 11%
PV of cash flows
1
$ 910
0.901
$ 819.8198
2
$ 1310
0.812
$ 1,063.225
3
$ 1570
0.731
$ 1,147.970
4
$ 1750
0.659
$ 1,152.779
Present value of cash flows @ 11%
$ 4183.7938
Year
Cash Flow
PV Factor of 20%
PV of cash flows
1
$ 910
0.833
$ 758.33
2
$ 1310
0.694
$ 1091.67
3
$ 1570
0.579
$ 1308.33
4
$ 1750
0.482
$ 1458.33
Present value of cash flows @ 20%
$ 4616.66
.
Year
Cash Flow
PV Factor of 30%
PV of cash flows
1
$ 910
0.769
$ 700.00
2
$ 1310
0.592
$ 1007.69
3
$ 1570
0.455
$ 1207.69
4
$ 1750
0.350
$ 1346.15
Present value of cash flows @ 30%
$ 4261.53
Year
Cash Flow
PV Factor of 11%
PV of cash flows
1
$ 910
0.901
$ 819.8198
2
$ 1310
0.812
$ 1,063.225
3
$ 1570
0.731
$ 1,147.970
4
$ 1750
0.659
$ 1,152.779
Present value of cash flows @ 11%
$ 4183.7938