You are given an investment to analyze. The cash flows from this investment are End of year 1. $11,550 2. $2,550 3. $25,...

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You are given an investment to analyze. The cash flows from this investment are End of year 1. $11,550 2. $2,550 3. $25,...

You are given an investment to analyze. The cash flows from this investment are End of year 1. $11,550 2. $2,550 3. $25,510 4. $16,130 5. $2,360 What is the present value of this investment if 15 percent per year is the appropriate discount rate? Round the answer to two decimal places.

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Answer 1

Answer #1

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

=11,550/1.15+2,550/1.15^2+25,510/1.15^3+16,130/1.15^4+2,360/1.15^5

which is equal to

=$39140.60(Approx).

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Answer 2

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