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Carol Thomas will pay out $28,000 at the end of the year 2, $30,000 at the...

Carol Thomas will pay out $28,000 at the end of the year 2, $30,000 at the end of year 3, and receive $32,000 at the end of year 4. With an interest rate of 11 percent, what is the net value of the payments vs. receipts in today's dollars? Use Appendix B. (Round "PV Factor" to 3 decimal places.)

A.$65,754.

B.$ 26,792.

C.$ 23,578.

D.$44,666.

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Homework Answers

Answer #1
Year Cashflows PV factor @ 11% Present Value
2        (28,000)        0.812        (22,721)
3        (30,000)        0.731        (21,932)
4          32,000        0.659          21,075
NPV       (23,578)
So option C is correct.
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