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Nu Things, Inc., is considering investing in a business venture with the following anticipated cash flow results: EOY Cash Fl

Determine Value of Investment

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Answer #1
EOY Cash Flow Factor PV
              -          -70,000        1.000        -70,000
               1         20,000        0.833         16,667
               2         19,000        0.694         13,194
               3         18,000        0.579         10,417
               4         17,000        0.482            8,198
               5         16,000        0.402            6,430
               6         15,000        0.335            5,023
               7         14,000        0.279            3,907
               8         13,000        0.233            3,023
               9         12,000        0.194            2,326
             10         11,000        0.162            1,777
             11         10,000        0.135            1,346
             12            9,000        0.112            1,009
             13            8,000        0.093               748
             14            7,000        0.078               545
             15            6,000        0.065               389
             16            5,000        0.054               270
             17            4,000        0.045               180
             18            3,000        0.038               113
             19            2,000        0.031                 63
             20            1,000        0.026                 26
NPV            5,652

Present Value Factor has been calculated by Formula = 1/(1+MARR)t

PV = Factor * Cash Flows

Value of Investment is NPV = $5,652

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