What is the present value of the following mixed cash flow stream if interest is 6% (rounded)?
$$\begin{array} { | l | l | }
\hline Y A A R & \text { QASH FLOW } \
\hline 1 & \$ 5,000 \
\hline 2 & 40,000 \
\hline 3 & \$ 9,500 \
\hline
\end{array}$$
A)$25,370
B)$19,813
C)$21,225
D)$18,750

Question

What is the present value of the following mixed cash flow stream if interest is 6% (rounded)?
$$\begin{array} { | l | l | } 
\hline Y A A R & \text { QASH FLOW } \
\hline 1 & \$ 5,000 \
\hline 2 & 40,000 \
\hline 3 & \$ 9,500 \
\hline
\end{array}$$
A)$25,370
B)$19,813
C)$21,225
D)$18,750

Quizplus · Accepted Answer

Solution using a calculator:
CF₀ = 0
CF₁ = 5,000
CF₂ = 8,000
CF₃ = 9,500
I = 6
Solve for NPV = $19,813 by calculator.

What Is the Present Value of the Following Mixed Cash