You are considering a project with the following cash flows: $$\frac { \text { Year } 1 } { \$ 1,200 } \quad \frac { \text { Year } 2 } { \$ 1,800 } \quad \frac { \text { Year } 3 } { \$ 2,900 }$$ What is the present value of these cash flows, given a 9% discount rate?

Question

Quizplus · Accepted Answer

Using the PV formula:

$$	ext{PV} = \frac{1,200}{1+.09} + \frac{1,800}{(1+.09)^2} + \frac{2,900}{(1+.09)^3} = \$4,855.27$$

Therefore, the present value of these cash flows is $4,855.27.

You Are Considering a Project with the Following Cash Flows Year 1$1,200 Year 2$1,800 Year 3$2,900\frac { \text { Year } 1 } { \$ 1,200 } \quad \frac { \text { Year } 2 } { \$ 1,800 } \quad \frac { \text { Year } 3 } { \$ 2,900 }$1,200 Year 1​$1,800 Year 2​$2,900 Year 3​

You Are Considering a Project with the Following Cash Flows $\frac { \text { Year } 1 } { \$ 1,200 } \quad \frac { \text { Year } 2 } { \$ 1,800 } \quad \frac { \text { Year } 3 } { \$ 2,900 }$