Cannonier, Inc., has identified an investment project with the following cash fl

Question

Cannonier, Inc., has identified an investment project with the following cash flows. Yesar Cash Flow $1,070 1,300 1,520 2,260 4 If the discount rate is 8 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.) Future value What is the future value at a discount rate of 11 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Future value What is the future value at a discount rate of 24 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Future value

Explanation / Answer

We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.

1.

A=1070(1.08)^3+1300(1.08)^2+1520(1.08)^1+2260

=$6765.81

2.A=1070(1.11)^3+1300(1.11)^2+1520(1.11)^1+2260

=$7012.30

3.A=1070(1.24)^3+1300(1.24)^2+1520(1.24)^1+2260

=$8183.77

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