Question: A firm is valuing a project that is expected to produce the following cash flows over the next eight years: Year Cash Flow 1 5,000

A firm is valuing a project that is expected to produce the following cash flows over the next eight years:

Year Cash Flow

1 5,000

2 6,500

3 7,000

4 8,000

5 8,000

6 8,000

7 8,000

8 9,500

a. What does the term discounting mean in finance? What is a discount rate?

b. What is the present value of these cash flows at a discount rate of 8%?

c. What is the present value of these cash flows 

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