If the discount rate is 9 percent, what is the future value of these cash flows
ID: 2773490 • Letter: I
Question
If the discount rate is 9 percent, what is the future value of these cash flows in Year 4? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)
What is the future value at an interest rate of 12 percent? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)
What is the future value at an interest rate of 23 percent? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)
Havana, Inc., has identified an investment project with the following cash flows.Explanation / Answer
The future value in year 4 is
Discount rate = 9%
(960 * 1.09^3) + (1,190 * 1.09^2) + (1,410 * 1.09^1) + (2,150 * 1.09^0) = $6,343.97.
Int rate = 12%
Future value is
(960*1.12^3) + (1190*1.12^2) + (1410*1.12^1) + (2150*1.12^0) = $6,570.67.
Int rate = 24%
Future value is
(960*1.24^3) + (1190*1.24^2) + (1410*1.24^1) + (2150*1.24^0) = $7,558.50
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