Question: I need some help with this problem. Not sure if I am calculating correctly. Thank you The following data have been gathered for a capital

I need some help with this problem. Not sure if I am calculating correctly. Thank you

I need some help with this problem. Not sure if I am

The following data have been gathered for a capital investment decision. Cash inflows: year 1 year 2 year 3 year 4 year 5 50,000 60,000 40,000 50,000 40,000 (the numbers in ( ) are what someone helped me with but they did not seem correct for some reason) 1sr Year 2nd Year 3rd Year Present value= Present value= Present value= Present value= 50000/(1+0.14)*1 60000/(1+0.14)*2 40000/(1+0.14)*3 50000/(1+0.14)*4 =26315.80 (46168.05 ) =11695.91 (26998.86) =10964.91 (29604.01) 43859.65 4th Year 5th Year Present value= 40000/(1+0.14) *5 =7017.54(20774.75) b. What would have been the present value of the cash flows if they were received In equal Installments over the five-year period at the same discount rate? (Assume the total cash inflows remain the same.) 1st year 2nd year 4th year 5th year 3rd year

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!