Question

What is the present value of the following cash flow stream at a rate of 10.5% per year?



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Select the correct answer.

a. $11,185.26

b. $11,174.06

c. $11,190.86

d. $11,179.66

e. $11,168.46

Answer 1

Year	Cash Flow	PV Factor	PV Of Cash Flow
a	b	c=1/1.105^a	d=b*c
0	$             -	1	$                          -
1	$      1,500	0.904977376	$             1,357.47
2	$      3,000	0.81898405	$             2,456.95
3	$      4,500	0.741162036	$             3,335.23
4	$      6,000	0.670734875	$             4,024.41
Present value of cash flow			$           11,174.06
Correct Option : b. $11,174.06
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