Question

The present value of the following annual cash flows is $9,920.77. The cash flow at t=2...

  1. The present value of the following annual cash flows is $9,920.77. The cash flow at t=2 is missing. Using an interest rate of 10%, find the value of the missing cash flow. Annual cash flows: $0 at time 0 and time 1, $4,000 at time 3, and $6,000 at time 4.

    $2500

    $2750

    $3000

    $3250
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Answer #1

As per the details given in the Question-

PREsent value =
Present value = 0 + +    +   
9920.77 = 0 + + 3005.26 + 4098.08
2817.43 =
CAsh flow = 1.21 * 2817.43
CAshflow = 3409.09
Cashflow for 2 year is 3409.09

I hope this clear your doubt.

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