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A Company has a project that they think will generate the following cash flows over the...

A Company has a project that they think will generate the following cash flows over the next 4 years: $100,000, $200,000, $200,000, -$400,000. If the cost of capital of 8%, what is most that company should pay for the project? (Enter only numbers and decimals in your response. Round to 2 decimal places).

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Answer #1
computation of present value of cash flow
year cash flow PVIF @ 8% present value
1 100000           0.9259      92,592.59
2 200000           0.8573    171,467.76
3 200000           0.7938    158,766.45
4 -400000           0.7350 (294,011.94)
present value    128,814.86
therefore maximum price =    128,814.86
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