Question

You are given an investment to analyze. the cash flows from this investment are end of year 1. $19,340 2. $2,280 3. $26,600 4. $24,240 5. $8,770 what is the present value of this investment if 15 percent per year is the appropriate discount rate?

Answer 1

PW = FW×(1+i)^-n

PW = $19340×1.15^-1 + $2280×1.15^-2 + $26600×1.15^-3 + $24240×1.15^-4 + $8770×1.15^-5 = $54250.90

hence PW = $54250.90