Moving Cash Flows What is the value in year 3 of a $250 cash flow made in year 15 when interest rates are 12 percent?
A)$45.67
B)$64.17
C)$177.95
D)$220.00

Name: Moving Cash Flows What is the value in year 3 of a $250 cash flow made in year 15 when interest rates are 12 percent? A)$45.67 B)$64.17 C)$177.95 D)$220.00
Brand: Quizplus
Rating: 4.8 (38 reviews)

Question

Quizplus · Accepted Answer

To move a cash flow from year 15 to year 3, we need to discount the cash flow by 12% for 12 years (from year 15 to year 3). 
PV = FV / (1 + r)^n 
PV = $250 / (1 + 0.12)^12 
PV = $64.17

Moving Cash Flows What Is the Value in Year 3