Question

Mendelson Implements records the following cash flows at the end of each year for a project. If the firm's discount rate is 11%, what is the FUTURE VALUE of the project at the end of the last year? Year Cash flow $794,633 $542,149 $836,200 $716,080 $520,354 A) $4,293,253 B) $4,200,696 D) $4,657,524 )) $2,547,837

Answer 1

We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period

A=794633*(1.11)^4+542149*(1.11)^3+836200*(1.11)^2+716080*(1.11)+520354

=$4293253(Approx).