"Consider the following cash flow and compute the equivalent
annual worth at i = 13.3%.
The cash flow for years 0 through 6 in dollars is:
21,000
-3,300
-3,300
-7,500
-11,400
-13,200
-21,100
The answer could be negative."
Year |
Cash flow |
PV factor @ 13.3% |
PV of cash inflow |
0 |
21000 |
21000 |
|
1 |
-3300 |
0.88261 |
-2912.621359 |
2 |
-3300 |
0.77900 |
-2570.716116 |
3 |
-7500 |
0.68756 |
-5156.696052 |
4 |
-11400 |
0.60685 |
-6918.074139 |
5 |
-13200 |
0.53561 |
-7070.080877 |
6 |
-21100 |
0.47274 |
-9974.772427 |
Total |
-13602.96 |
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