Monster Beverage is considering purchasing a new canning machine.

This machine costs $3,500,000 up front.

Required return = 9.5%

Year	Cash Flow	Discounted Cash Flow
0	$-3,500,000	$-3,500,000
1	$1,000,000	$913,242
2	$1,200,000	$1,000,813
3	$1,300,000	$990,150
4	$900,000	$626,017
5	$1,000,000	$635,228

(please note this is question) What is the present value of all future cash flows? Note: do not include value of Year O cash flow. ?

Present value = Future value / (1 + r)ⁿ

r = required return = 9.50%

n = number of periods = 3

Present value = $1,300,000 / (1.095)³

Present value = $1,300,000 * 0.761654

Present value = $990,150.01 or

Present value = $990,150 (rounded to nearest whole number)