Round to 2 decimal places (.00) (Present value of an uneven stream of payments)

Question

Round to 2 decimal places (.00)

(Present value of an uneven stream of payments) You are given three investment alternatives to analyze The cash flows from these three investments are shown in the popup window: . Assuming a discount rate of 23 percent, find the present value of each investment. a. What is the present value of investment A at 23 percent annual discount rate? $ 47659.04 (Round to the nearest cent.) b. What is the present value of investment B at 23 percent annual discount rate? $ 22966.97 (Round to the nearest cent) c. What is the present value of investment C at 23 percent annual discount rate? $[] (Round to the nearest Cent.)

Explanation / Answer

Cash flows P.V(23%,n) present value @23% $17,000 P.V(23%,1yr) =0.813 $13,821 $85,000 P.V(23%,6yrs)=0.388 $33,980 $17,000 P.V(23%,10yrs)=0.126 $2,142 Total P.V $49,943 (approx)

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