Question

Huggins Co. has identified an investment project with the following cash flows.

Year Cash Flow

1 $ 820

2 $1,130

3 $1,390

4 $1,525

If the discount rate is 10 percent, what is the present value of these cash flows?

Present value $ 3765,26 What is the present value at 16 percent?

Present value $ 3279.42 What is the present value at 25 percent?

Present value $ 2715.52

*These are my answers I want to know if I got them right for each year?

Answer 1

Answer 1) Present value if the discount rate is 10 percent

Year	Cash flows	Present value @ 10% (discount factor)	Present value of Net Cash flows
1	820	0.909	745.38
2	1130	0.826	933.38
3	1390	0.751	1043.89
4	1525	0.683	1041.575
Total Present Value of Cash Inflows			3764.23

Answer 2) Present value if the discount rate is 16 percent

Year	Cash flows	Present value @ 16% (discount factor)	Present value of Net Cash flows
1	820	0.862	706.90
2	1130	0.743	839.77
3	1390	0.641	890.51
4	1525	0.552	842.24
Total Present Value of Cash Inflows			3279.43

Answer 3) Present value if the discount rate is 25 percent

Year	Cash flows	Present value @ 25% (discount factor)	Present value of Net Cash flows
1	820	0.800	656.00
2	1130	0.640	723.20
3	1390	0.512	711.68
4	1525	0.410	624.64
Total Present Value of Cash Inflows			2715.52