Problem 5-1 Present Value and Multiple Cash Flows [LO 1]
Mendez Company has identified an investment project with the following cash flows.
Year
1
Cash Flow
$ 1,010
820
2
3
1,450
4
1,810
a. If the discount rate is 12 percent, what is the present value of these cash flows?
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
b. What is the present value at 15 percent?
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
c. What is the present value at 21 percent?
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
Answer is complete but not entirely correct.
a. Present value at 12 percent
$
3,737.90
b. Present value at 15 percent
$
3,456.99 X
c. Present value at 21 percent
$
3,058.00