Suzanne has identified a project with the following cash flows.What is the present value of the cash flows at time 0 if the interest rate is 9%?

A) $3,521.63
B) $3,230.86
C) $3,838.58
D) $4,225.00
E) $3,488.90

Question

Suzanne has identified a project with the following cash flows.What is the present value of the cash flows at time 0 if the interest rate is 9%?

A) $3,521.63 
B) $3,230.86 
C) $3,838.58 
D) $4,225.00 
E) $3,488.90

Quizplus · Accepted Answer

Find the present value of each cash flow and then add them together.
PV = 11ea7fdb_fc2a_f382_a768_0f22e5938d07_TB2902_00 PV = 11ea7fdb_fc2a_f383_a768_37e76d263578_TB2902_00 = $1,834.86
PV = 11ea7fdb_fc2b_1a94_a768_fbc378c9f8f7_TB2902_00 = $547.09
PV = 11ea7fdb_fc2b_1a95_a768_37610e4772fd_TB2902_00 = $289.57
PV = 11ea7fdb_fc2b_1a96_a768_47809147eabe_TB2902_00 = $850.11
1,834.86 + 547.09 + 289.57 + 850.11 = $3,521.63

Suzanne Has Identified a Project with the Following Cash Flows