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hat is the present value of the following set of cash​ flows, discounted at 14.7% per​ year? year 1 2 3 4 cf $98 −$98 $193 −$193 question content area bottom part 1 the present value of the cash flow stream is ​$enter your response here. ​(round to the nearest​ cent.)

Respuesta :

The Present Value will be = $28.51

The cash flows for each year are multiplied by a 15% present value factor for years 1 through 4 before being added together to determine the net present value.

We are Given,

  • PV factor equals 1 / (1 + r)n

Where,

  • 15% is the interest rate, or r.
  • period = n = 1 to 4

Actual Value

  • = $200 PV factor of the third year - $200 PV factor of the fourth year + $100 PV factor of the first year - $100 PV factor of the second year
  • = $100 × 0.8696 - $100 × 0.7561 + $200 × 0.6575 - $200 × 0.5717
  • = $86.96 - $75.61 + $131.5 - $114.34

Therefore = $28.51

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