Question 1 What is the net present value of the following cash flows if the relevant discount rate is 7 percent? Year Cash Flow 0 - $11,520.00 1 $81.00 2 $650 3 $880 4 $2,300 5 $16,800.00 $3,574.61 $2,900.15 $3,248.87 $2,311.92 $2,861.62
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The formula for the present value of a single cash flow is: $$PV = \frac{CF}{(1+r)^n}$$ where: - PV is the present value - CF is the cash flow - r is the discount rate - n is the number of periods Show more…
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