Question

2 What is the present value of the following cash flow stream at a rate of 8.0%?

Years:	0	1	2	3
CFs:	$750	$2,450	$3,175	$4,400

Answer 1

Present value=Cash flows*Present value of discounting factor(rate%,time period)

=750+2450/1.08+3175/1.08^2+4400/1.08^3

which is equal to

=$9233.43(Approx).

Answer 2

=

Present value=Cash flows*Present value of discounting factor(rate%,time period)

=750+2450/1.08+3175/1.08^2+4000/1.08^3

which is equal to

=$9233.43(Approx).

Answer 3

=750+2450/1.08+3175/1.08^2+4000/1.08^3