If the discount rate is 8 percent, what is the present value of these cash flows

Question

    

  

If the discount rate is 8 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

  

What is the present value at 18 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

  

  

What is the present value at 24 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

  

Huggins Co. has identified an investment project with the following cash flows.

Explanation / Answer

2391.051

Calculation of Present Value Particulars Year Cash Flow PVF @ 8% PVF @ 18% PVF @ 24% PV @ 8% PV @ 18% PV @ 24% Cash inflow at year 1 1 730 0.925926 0.847458 0.806452 675.926 618.6443 588.71 Cash inflow at year 2 2 950 0.857339 0.718184 0.650364 814.4721 682.2748 617.8458 Cash inflow at year 3 3 1210 0.793832 0.608631 0.524487 960.5367 736.4435 634.6293 Cash inflow at year 4 4 1300 0.73503 0.515789 0.422974 955.539 670.5257 549.8662 Total present value of cash flows 3406.474 2707.888

2391.051

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