Question

Consider five annual cash flows of $7,000 starting in one year, followed by a single cash...

Consider five annual cash flows of $7,000 starting in one year, followed by a single cash flow of $4,000 at the end of year six. What is the present value of this stream of cash flows if your discount rate is 7%? Round to the nearest cent.

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Answer #1

Ans $ 31366.75

Year Project Cash Flows (i) DF@ 7% DF@ 7% (ii) PV of Project ( (i) * (ii) )
1 7000 1/((1+7%)^1) 0.934579                               6,542.06
2 7000 1/((1+7%)^2) 0.873439                               6,114.07
3 7000 1/((1+7%)^3) 0.816298                               5,714.09
4 7000 1/((1+7%)^4) 0.762895                               5,340.27
5 7000 1/((1+7%)^5) 0.712986                               4,990.90
6 4000 1/((1+7%)^6) 0.666342                               2,665.37
PV                             31,366.75
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