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You are valuing an investment that will pay you $19,000 the first year, $21,000 the second...

You are valuing an investment that will pay you $19,000 the first year, $21,000 the second year, $24,000 the third year, $26,000 the fourth year, $30,000 the fifth year, and $36,000 the sixth year (all payments are at the end of each year). What is the value of the investment to you now if the appropriate annual discount rate is 11.00%?

$105,887.40
$82,369.81
$156,000.00
$134,301.24
$173,659.20
business   finance   
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Answer #1

Calculation of present value

Year Cashflow PVF @ 11% PV
1              19,000.00 0.9009009      17,117.12
2              21,000.00 0.81162243      17,044.07
3              24,000.00 0.73119138      17,548.59
4              26,000.00 0.65873097      17,127.01
5              30,000.00 0.59345133      17,803.54
6              36,000.00 0.53464084      19,247.07
Total    105,887.40

Answer : $105,887.40

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