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Suppose you receive $3,000 a year in years 1 through 4, $4000 in years 5 through 9 and $2000 in year 10, with all the money to be received at the end of the year. If you discount is 12% what is the present value of these cash flows?

Respuesta :

Answer:

$18,919.60

Explanation:

to find the present value of the cash flows, discount the cash flows at the discount rates.

Present value can be calculated using a financial calculator:

Cash flow from year 1 to 4 = $3,000

Cash flow from year 5 to 9 is $4000 

Cash flow in year 10 is $2000

Discount rate = 12%

Present value = $18,919.60

I hope my answer helps you

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