Rally, Inc., has identified an investment project with the following cash flows. If the discount rate is

Question:

Rally, Inc., has identified an investment project with the following cash flows. If the discount rate is 8 percent, what is the future value of these cash flows in Year 4? What is the future value at a discount rate of 1 percent? At 24 percent?

Year Cash Flow

1 ........................$700

2 ......................... 900

3 ...................... 1,400

4 .......................2,000

Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal... Future Value
Future value (FV) is the value of a current asset at a future date based on an assumed rate of growth. The future value (FV) is important to investors and financial planners as they use it to estimate how much an investment made today will be worth...