If the discount rate is 7 percent, what is the future value of these cash flows
ID: 2383750 • Letter: I
Question
If the discount rate is 7 percent, what is the future value of these cash flows in Year 4? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
What is the future value at a discount rate of 13 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
What is the future value at a discount rate of 22 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Cannonier, Inc., has identified an investment project with the following cash flows.Explanation / Answer
Future value at discount rate of 7% = $1,010 * (1 + 7%)3 + $1,240 * (1 + 7%)2 + $1,460 * (1 + 7%)1 + $2,200
= $6,419.17
Future value at discount rate of 13% = $1,010 * (1 + 13%)3 + $1,240 * (1 + 13%)2 + $1,460 * (1 + 13%)1 + $2,200
= $6,890.48
Future value at discount rate of 22% = $1,010 * (1 + 22%)3 + $1,240 * (1 + 22%)2 + $1,460 * (1 + 22%)1 + $2,200
= $7,660.82
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