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3. McCann Co. has identified an investment project with the following cash flows. If the discount rate is 8 percent, what is
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Ans.

Present value of cash inflows in an investment project of McCann Co.-

  • Discounting Cash flows at 8%
Year Cashflows $(A) Present value factor@8%(B) Present value $(A*B)
1 800 0.9259 740.72
2 1010 0.8573 865.873
3 1290 0.7938 1024.002
4 1160 0.735 852.6
TOTAL 3483.195

Therefore,

Present value of cash inflows in an investment project of McCann Co.-$ 3483.195

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