Year | Cash inflows | PVF at 20% | Present value | |||||
1 | 0 | 0.833333 | 0 | |||||
2 | 0 | 0.694444 | 0 | |||||
3 | Z | 0.578704 | 0.5787 Z | |||||
4 | 0 | 0.482253 | 0 | |||||
5 | 470 | 0.401878 | 188.8825 | |||||
6 | 470 | 0.334898 | 157.402 | |||||
7 | 470 | 0.279082 | 131.1684 | |||||
8 | 470 | 0.232568 | 109.307 | |||||
9 | 470 | 0.193807 | 91.08915 | |||||
Present value of Inflows | 677.85 +0.5787 Z | |||||||
Present value of outflows in Year-0 = Z | ||||||||
As per question, present value of inflowws and outflows is equal. Hence, the equation is as under: | ||||||||
Z = 677.85 +0.5787 Z | ||||||||
Z = 1608.95 | ||||||||
Answer is $ 1608.95 | ||||||||
Find the value of the unknown quantity Z in the following diagram, such that the equivalent...
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