Suppose you consider purchasing a lab equipment that costs $1000. The forecasted cash flow stream from the use of this equipment is the following: Year 1 $300; Year 2 $400: Year 3 $500, and Year 4 $600. What is the present value of the new equipment if the appropriate discount rate (i.e., interest rate, or opportunity cost) is 8%?

Answer rating: 100% (QA)

To calculate the present value of the cash flow stream we need to disco... View the full answer