Given the cash flow table below, determine the unknown value "X" for an interest rate of 6%.
$$\begin{array} { | l | l | l | l | l | l | l | l | l | l | l | l | }
\hline \text { Year } & 0 & 1 & 2 & 3 & 4 & 5 & 6 & 7 & 8 & 9 & 10 \
\hline \text { Cash flow } & - X & 400 & 500 & - X & 700 & 800 & 900 & 1,000 & 1,100 & 1,200 & 1,300 \
\hline
\end{array}$$
A) $2436.89
B) $3129.41
C) $2935.66
D) $1610.53

Question

Given the cash flow table below, determine the unknown value "X" for an interest rate of 6%.
$$\begin{array} { | l | l | l | l | l | l | l | l | l | l | l | l | } 
\hline \text { Year } & 0 & 1 & 2 & 3 & 4 & 5 & 6 & 7 & 8 & 9 & 10 \
\hline \text { Cash flow } & - X & 400 & 500 & - X & 700 & 800 & 900 & 1,000 & 1,100 & 1,200 & 1,300 \
\hline
\end{array}$$
A) $2436.89
B) $3129.41
C) $2935.66
D) $1610.53

Quizplus · Accepted Answer

The present value of cash flows at 6% interest rate should equal zero. Solving for X using the present value formula gives X = $2935.66.

Given the Cash Flow Table Below, Determine the Unknown Value