What is the present value of an investment involving $200 received at the end of year 1 through 5, a $300 cash outflow at the end of year 6, and $500 received at the end of years 7 through 10, given an annual percentage rate of 5 percent compounded annually?
Calculating Net Present Value of Investment:-
| Year | Cash Flows | PVIF@ 5% | Present Value |
| 1 | 200 | 0.9523 | 190.46 |
| 2 | 200 | 0.9070 | 181.4 |
| 3 | 200 | 0.8638 | 172.76 |
| 4 | 200 | 0.8227 | 164.54 |
| 5 | 200 | 0.7835 | 156.7 |
| 6 | (300) | 0.7462 | (223.86) |
| 7 | 500 | 0.7106 | 355.3 |
| 8 | 500 | 0.6768 | 338.4 |
| 9 | 500 | 0.6446 | 322 |
| 10 | 500 | 0.6139 | 306.95 |
| Total | 1964.65 |
So, the Present Value of Investment is $1964.65
What is the present value of an investment involving $200 received at the end of year...
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