Question: 1. Present Value and Multiple Cash Flows [LO1] Huggins Co. has identified an investment project with the following cash flows. If the discount rate is
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1. Present Value and Multiple Cash Flows [LO1] Huggins Co. has identified an investment project with the following cash flows. If the discount rate is 10 percent, what is the present value of these cashflows? What is the present value at 18 percent? At 24 percent? Year CF R=0.10 R=0.18 R=0.24 1 530 2 690 875 4 1090 SUM OF PV 1 3 4 2. Present Value and Multiple Cash Flows [LO1] Investment X offers to pay you $4,200 per year for eight years, whereas Investment Y offers to pay you $6,100 per year for five years. Which of these cash flow streams has the higher present value if the discount rate is 5 percent? If the discount rate is 15 percent? Investment Investment Y r= 0.05 r=0.15 r=0.05 r=0.15 PV FV PMT RATE NPER
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