What is the present value of the following cash flow stream at a rate of 12.0%?
A) $9,699
B) $10,210
C) $10,747
D) $11,284
E) $11,849

Question

What is the present value of the following cash flow stream at a rate of 12.0%? ​ 
A) $9,699 
B) $10,210 
C) $10,747 
D) $11,284 
E) $11,849

Quizplus · Accepted Answer

Using a financial calculator or Excel, we can calculate the present value of the cash flow stream as follows:

CF0 = 0 
CF1 = $3,000 
CF2 = $4,000 
CF3 = $6,000 
CF4 = $7,000

I/Y = 12.0 
N = 4

Solving for NPV, we get $10,747. Therefore, the best choice is C.

What Is the Present Value of the Following Cash Flow