Question

Year Cash Flow 1 $ 1,270 2 1,210 3 1,580 4 1,940 If the discount rate is 10 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value $ What is the present value at 18 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value $ What is the present value at 24 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value $

Answer 1

Year	Cash flows	Discount rate 10%		Discount rate 18%		Discount rate 24%
		Discount Factor	Discounted cash flows	Discount Factor	Discounted cash flows	Discount Factor	Discounted cash flows
1	1270	0.909091	1154.55	0.847458	1076.27	0.806452	1024.19
2	1210	0.826446	1000.00	0.718184	869.00	0.650364	786.94
3	1580	0.751315	1187.08	0.608631	961.64	0.524487	828.69
4	1940	0.683013	1325.05	0.515789	1000.63	0.422974	820.57
Present value of cash flows			4666.67		3907.54		3460.39
Present value at discount rate 10 percent is $4,666.67
Present value at discount rate 18 percent is $3,907.54
Present value at discount rate 24 percent is $3,460.39
Present value factor =1/(1+r)n