contestada

What is the present value of following streams of future cash flows if the discount rate is 11%?

Year 1: $10,000

Year 2: $11,000

Year 3: $13,000

a. $35,847

b. $27,949

c. $33,521

d. $29,067

e. None of the above

Respuesta :

Answer:

b. $27,949

Explanation:

The computation of the present value is presented below

Year       Amount            DF factor @ 11%              Present value

1            $10,000           0.90909                          $9,090.91

2           $11,000            0.82645                          $9,090.85

3           $13,000           0.75131                             $9,767.03

Total                                                                       $27,948.79

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