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You assume that books for the next four years will cost $600 in one year, $700 in two years, $800 in three years, and $400 in four years when you really don't care anymore. At a discount rate of 5%, what is the present value of all four cash flows combined?

Respuesta :

Answer:

$2,226.50

Explanation:

The present value can be found by discounting the cash flows at discount rates.

The present value can be found using a financial calculator

Cash flow for year one = 600

Cash flow for year two = 700

Cash flow for year three = 800

Cash flow for year four = 400

Discount rate =5

Present value =$2,226.50

I hope my answer helps you

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