Homework Answers
| Computation of Present Value of investment :- | ||||
| Chart values are based on: | ||||
| i= | 7% | |||
| Year | Net Cash Inflows | × | PV Factor @ 7% | Present Value |
| a | b | c | d = b*c | |
| 1 | $ 15,000 | 0.93458 | $14,019 | |
| 2 | $ 15,000 | 0.87344 | $13,102 | |
| 3 | $ 15,000 | 0.81630 | $12,244 | |
| 4 | $ 15,000 | 0.76290 | $11,443 | |
| 5 | $ 15,000 | 0.71299 | $10,695 | |
| 6 | $ 15,000 | 0.66634 | $9,995 | |
| 7 | $ 15,000 | 0.62275 | $9,341 | |
| 8 | $ 15,000 | 0.58201 | $8,730 | |
| 8 | $ 150,000 | 0.58201 | $87,301 | |
| PV of Cash Inflows | $176,871 | |||
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