You have just received a windfall from an investment you made in a friend's business. She...

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You have just received a windfall from an investment you made in a friends business. She will be paying you $24,615 at the e

business accounting

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Answer 1

Answer #1

a.Present value of inflows=cash inflow*Present value of discounting factor(rate%,time period)

=24615/1.145+49230/1.145^2+73845/1.145^3

=$108242(Approx).

b.We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.

A=108242*(1.145)^3

=$162484(Approx).

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Answer 2

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