An investment provides you with $1,000 after six years and $2,000 after nine years. What is...
An investment provides you with $1,000 after six years and $2,000 after nine years. What is the present value of these cash flows if you require a 4% rate of return (discount the cash flows at that rate)?
Homework Answers
| 4.00% | ||||
| NPV@ 0.04 | ||||
| Year | Cash flow | PV factor | PV-Cash flow | |
| 0 | 1.000 | - | ||
| 1 | 0.962 | - | ||
| 2 | 0.925 | - | ||
| 3 | 0.889 | - | ||
| 4 | 0.855 | - | ||
| 5 | 0.822 | - | ||
| 6 | 1,000.00 | 0.790 | 790.31 | |
| 7 | 0.760 | - | ||
| 8 | 0.731 | - | ||
| 9 | 2,000.00 | 0.703 | 1,405.17 | |
| Total PV | 2,195.49 | |||
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