An investment pays $10,000 at the end of year 1, $15,000 at the end of year...

Question

Question

Answer 1

Answer #1

It shall be noted that PV = CF/(1+i)^n

Where,

PV = Present Value

CF = Cash Flow

i = interest rate

n = nth Year

There are 3 cash flows - $10000 at the end of the Year1

$15000 at the end of the Year2

$20000 at the end of the Year3

Thus, the present value of the series of the payment is:

Thus, the correct answer is close to 42150.51

Hence, the correct answer is $42,150.51

Answer 2

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