The Leaning Tower of Pizza Company plans to save $20,000, $25,000, $27,500, and $30,000 at the...
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The Leaning Tower of Pizza Company plans to save $20,000, $25,000, $27,500, and $30,000 at the end of each year for Years 1 to 4, respectively.
A.) What would be the present value using the same cash flows in years 1 through 4 for the Leaning Tower of Pizza Company, if the discount rate is r = 3.5%?
Please show the formula you used for the problem first thank you.
Homework Answers
PV = FV / (1 + r)^t
PV of cash flows = $20,000/(1.035)^1 + $25,000/(1.035)^2 + $27,500/(1.035)^3 + $30,000/(1.035)^4
PV of cash flows = $93,608.13
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